Top Australian oil and gas producers plan mega-merger

Australia

SYDNEY, December 8, 2023 – Australia’s top oil and gas producers, Woodside Energy and Santos, have begun discussions to merge into a USD 52-billion giant, Reuters reported on Thursday.

The merged entity would create the largest LNG producer in Australia and the world’s second-largest exporter, with annual sales of 60 million tonnes of LNG per year.

Based on 2022 levels, the new company would produce more than 260 million boe of oil and gas and have proven plus probable reserves of 5.39 billion boe.

Currently Woodside Energy is valued at USD 37.4 billion, and Santos is valued at USD 14.5 billion.

However, the former company said that talks were preliminary and were not certain.

The deal will also need to be approved by the Australian Competition and Consumer Commission. A source at Reuters said that the companies are willing to sell off smaller domestic assets to receive approvals.

According to Reuters, both companies have seen a significant decrease in stock value in 2023, with Woodside Energy’s shares down by 15.4% and Santos’ shares down by 4.3% since the beginning of the year.

Australia’s E&P market has already gone through many recent mergers, including Woodside Energy taking over BHP Group in June 2022 and Santos’ acquisition of Oil Search in December 2021.

The discussion also follows a slew of high-profile merging agreements involving American energy giants signed in 2023, including Chevron agreeing to acquire Hess International for USD 60 billion and ExxonMobil agreeing to purchase Pioneer Natural Resources for USD 64 billion in October 2023.