Santos says it has not lost a single employee through the COVID-19 crisis and has big plans for the future

Santos says the Cooper Basin, which has been supplying the state with gas for more than 50 years, has a five-decade future if carbon capture and storage progresses.

Santos managing director Kevin Gallagher in one of the control rooms at their Adelaide headquarters. Picture: Mark Brake

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SANTOS has weathered the COVID-19 crisis without losing a single employee, and is predicting as many as five more decades of activity in the Cooper Basin gas fields if carbon capture and storage is embraced.

For that to realise its full potential however, it needs bipartisan policy support at the federal level, the Adelaide-based energy company’s managing director Kevin Gallagher told The Advertiser this week.

Mr Gallagher said the hard work the company had done over the past four years meant that it was able to bunker down and withstand a crash which at one stage saw the oil price go negative.

While other energy companies have had to lay off in some cases hundreds of staff, Santos managed to keep its core workforce in jobs, although it did have to lay off 150 contractors in growth and discretionary projects.

But Mr Gallagher said a combination of hopes for carbon capture and storage (CCS), strong gas demand, a possible renaissance of Australian manufacturing, and growth projects the company already has in the wings, means the future is bright.

A Santos employee at the Moomba gas plant.

CCS involves capturing the carbon produced in industrial processes, and storing it underground in perpetuity.

Mr Gallagher said the Cooper Basin gas fields, which Santos has been drawing energy from since the 1960s, are excellent candidates for such projects.

“That’s a really exciting opportunity for Santos ... what that will do is not only capture carbon emissions from the Cooper Basin but it creates revenue, creating opportunities in the future to offset other high-emitting industries by taking their CO2 and injecting it permanently back into the ground,'' he said.

Mr Gallagher said he’d like to see bipartisan support for Australia progressing CCS opportunities.

“Fundamentally nothing reduces carbon emissions like CCS does because it puts them back in the ground,’’ he said.

Mr Gallagher said renewables were good for electricity supply, but that only accounted for 20 per cent of energy use, with industries such as steelmaking and cement manufacture needing a different solution. Mr Gallagher said CCS could also be a key plank in the nation’s push for a hydrogen industry.

Santos is already engaged in engineering design works for a CCS project at the company’s Moomba gas processing plant in northeast SA, and expects to make a decision whether to go ahead with it by the end of this year.

Mr Gallagher said the company’s Cooper Basin gas fields had also been rejuvenated. In 2016 they were expected to last just nine more years, but this lifespan has now been extended to 22 years due to new exploration and development work.

Mr Gallagher put the company’s resilience through COVID-19 down to some tough decisions made in 2016, when the company was forced to lay off hundreds of staff as the oil price tumbled.

“Even though the oil (recently) price crashed to lows we haven’t seen this century, we were able to keep all of our rigs running in the Cooper Basin, in Queensland, keep all of our employees employed,’’ he said.

He said the company had a suite of growth projects ready to roll out once the turbulence in financial markets had smoothed out, and gas could provide a strong underpinning for the renewed interest in rejuvenating Australia's manufacturing sector.

But for this to happen, policies such as moratoria on gas drilling in the eastern states had to be addressed.

“We’ve got hundreds of years of gas supply on the east coast ... if we can just free up the red tape and green tape and allow the industry to develop these resources that will be great for Australia and create tens of thousands of jobs directly in the industry, but a whole lot more indirectly.’’