Explained: Santos and bidder Abu Dhabi National Oil Company are two giants in their regions
The Abu Dhabi consortium behind the $30bn Santos takeover bid is a major player across the Middle East and Africa looking to expand globally. So who are the key players in this mega deal?
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The Abu Dhabi conglomerate behind a near $30bn bid to buy Australian oil and gas giant Santos is a major player across the Middle East and Africa, with projects ranging from gas exploration and production to refineries, carbon capture and renewables.
Its pitch to acquire Santos is aimed at expanding its global footprint into new regions, starting with the expansive portfolio of projects Santos is developing across Australia, Southeast Asia and stretching up to the Alaska.
So who are the key players behind the deal, what does their portfolio look like and what do they stand to gain if their pitch to acquire Santos is approved?
What’s the deal?
A consortium of investors led by the state-owned Abu Dhabi National Oil Company (ADNOC) and including sovereign wealth fund Abu Dhabi Development Holding Company and US private equity firm Carlyle has lobbed a near $30bn bid for Australian oil and gas giant Santos.
The Santos board has indicated it intends to endorse the $8.89 a share offer.
In a sign that the consortium is looking to sway favour, ADNOC has promised that should the deal close it will maintain Santos’ headquarters in Adelaide, support local employment and communities where it operates, and accelerate investment in gas in Australia and the wider region in order to “provide reliable and affordable energy and low carbon solutions to customers in Australia, the Asia Pacific and beyond”.
Who are the major players?
Abu Dhabi National Oil Company
The Abu Dhabi National Oil Company, known as ADNOC, is the state-owned oil company of Abu Dhabi.
Established in 1971, ADNOC is wholly owned by the Abu Dhabi government, and is one of the world’s largest energy companies.
It runs 16 subsidiary companies in upstream, midstream, and downstream stages of production, including the development of onshore and offshore gas fields, the operation of sophisticated pipeline networks and shipping fleets, as well as refineries, petrochemical plants and a growing international distribution network.
Sultan Ahmed Al Jaber has served as chief executive of ADNOC since 2016, implementing a significant transformation programme, including a $23bn investment in green projects and decarbonisation technologies to support a net zero goal by 2045.
Dr Al Jaber is also UAE Minister of Industry and Advanced Technology.
ADNOC headquarters are located in a skyscraper office complex in Abu Dhabi.
ADNOC’S Major Projects
Ruwais LNG
The Ruwais LNG project, currently being developed in Al Ruwais Industrial City in Abu Dhabi, will be the first liquefied natural gas export facility in the Middle East and Africa region to operate on clean power.
Ruwais LNG will have a total export capacity of 9.6 million tonnes, more than doubling ADNOC’s LNG production output.
In a year, the facility will produce enough LNG to power every home in the City of London for more than two years.
Offshore electrification
ADNOC is developing a $US3.8bn sub-sea transmission network in the Middle East and North Africa region to connect ADNOC’s offshore operations to Abu Dhabi gas company TAQA’s clean onshore power network.
Clean power will be sent from two onshore locations, Shweiha and Mifra, to Das Island and Zakum Island via two subsea cables both over 130km long.
From these offshore islands power will be distributed to other offshore installations.
Waste heat recovery
Completed in 2024, the waste heat recovery project at Ruwais refining facility captures enough waste heat to generate up to 230MW of power.
The project has been designed to increase power production with no additional emissions, and is part of ADNOC’s work to decarbonise its operations.
World’s largest 3D seismic study
ADNOC’s Thamama Center of Excellence is deploying cutting-edge technology and imaging techniques to gather critical information from Abu Dhabi’s subsurface.
Thamama experts are creating high-resolution 3D images of the emirate’s subsurface to model and identify geological formations and find Abu Dhabi’s untapped resources as well as rock formations to store carbon dioxide.
Hail and Ghasha Project
The multi-billion dollar gas development is expected to begin production later this year, producing more than 1.5 billion cubic feet per day by 2030.
It is also expected to produce over 120,000 barrels of oil and condensate per day, while a carbon capture project is expected to store 10 million tonnes per year by 2030.
Unconventional gas
ADNOC is currently exploring potential unconventional gas resources as part of its strategy to enable the UAE to become gas self-sufficient by 2030.
In November 2019, the Supreme Petroleum Council announced the discovery of 160 trillion standard cubic feet of recoverable unconventional gas resources in the UAE.
The Santos backstory
The oil and gas giant is Australia’s second largest gas producer behind rival Woodside.
Beginning as South Australia Northern Territory Oil Search in 1954, the company made its first significant natural gas discovery in the Cooper Basin in 1963, and has since gone on to become a major player in the region, with projects across Australia and further afield in Papua New Guinea, Southeast Asia and Alaska.
The portfolio now includes conventional offshore and onshore gas, coal seam gas, LNG production facilities, and Australia’s first commercial carbon capture project at Moomba in South Australia.
The acquisition of Oil Search in 2021 cemented the company’s position as one of the largest oil and gas companies in the Asia-Pacific region.
Current managing director Kevin Gallagher has overseen much of the expansion over his nearly 10 years at the top, while at the same time helping to lift the company’s share price which was languishing at near record lows at the time of his appointment.
Major Santos Projects
Cooper Basin - South Australia
Santos maintains extensive operations across the Cooper Basin as the basin’s major producer. The oil fields are connected via 6300km of pipelines to multiple processing facilities, including the major Moomba gas plant.
Operations include natural gas, oil, ethane and LPG production, complemented by unconventional gas exploration.
The basin remains strategically vital to Santos, providing gas to eastern Australian markets.
Moomba carbon capture and storage (Moomba CCS) - South Australia
The Moomba CCS project started up last October, storing CO2 in Cooper Basin depleted reservoirs.
Santos injected 340,000 tonnes of carbon dioxide in 2024.
Santos and partner Beach Energy is on course to meet their targeted 1.7 million tonnes per annum, the equivalent of taking 700,000 petrol cars off the road, or 10 per cent of SA’s total emissions in 2022.
Port Bonython - South Australia
Located 16km northeast of Whyalla and owned by the SACB joint venture, the Santos operated Port Bonython facility is comprised of a deep-water port, gas fractionation plant and a storage facility.
Santos supplies LPG gas to the domestic market from Port Bonython, powering homes and businesses around the country.
Gladstone LNG (GLNG) - Queensland
The GLNG plant is located on Curtis Island about 5km north of Gladstone.
It was commissioned in 2015, and has capacity of 7.8 million tonnes of LNG per year, which is around 10 per cent of Australia’s LNG capacity.
GLNG is a joint venture between Santos and three of the world’s leading energy companies – Petronas from Malaysia, Total from France and KOGAS from South Korea.
GLNG sells approximately two cargoes of LNG into Asia per week.
Papua New Guinea LNG (PNG LNG)
Santos holds about a 42.5 per cent interest in PNG LNG – a development that includes gas production and processing facilities in Papua New Guinea.
The company significantly expanded its stake in the project through its 2021 merger with Oil Search, making it a cornerstone asset in Santos’ portfolio.
The $29bn project has the capacity to produce more than 8.3 million tonnes of LNG annually.
Dorado - Offshore Western Australia
Santos’ Dorado oil field represents one of Australia’s largest offshore oil discoveries in recent decades, consisting of 150 million barrels of oil.
Santos holds an 80 per cent interest in the project, which is located in the Bedout Basin, approximately 150km north of Port Hedland.
Narrabri - NSW
Santos’ Narrabri Gas Project is expected to supply NSW homes, small businesses, major industries and electricity generators with up to 50 per cent of the state’s natural gas needs.
It involves the production of natural gas through the progressive development of up to 850 wells connected into processing facilities south of Narrabri at Leewood and Bibblewindi.
Last month the company won a decade-long fight over the controversial development in north-western NSW, securing the green light from the Native Title Tribunal.
Barossa - Offshore Northern Territory
The Barossa Gas Project, located about 285km offshore northwest of Darwin, is an offshore gas and condensate project that proposes to provide a new source of gas to the existing Darwin liquefied natural gas (DLNG) facility in the Northern Territory.
In April, Santos secured final regulatory approval for the $5.8bn project, which is expected to produce about 3.7m tonnes of LNG annually for 20-plus years.
Pikka - Alaska, US
The Pikka Phase 1 project is the focus for Santos, including a single drill site, an oil processing facility, and other infrastructure to support production of 80,000 barrels of oil per day.
In 2022, Santos, as operator of the joint venture, announced a final investment decision had been taken on the project, with first oil expected in 2026.
What’s next?
The current offer is described as a “non-binding indicative offer”, meaning the bidding party can still pull out of negotiations.
ADNOC is currently undertaking due diligence on its potential acquisition, which is expected to take up to eight weeks before a binding final offer could be made.
The transaction would then be subject to a number of regulatory approvals, most importantly from the Foreign Investment Review Board, and ultimately Treasurer Jim Chalmers, who will have to decide if it poses a threat to Australia’s strategic interests.
It’s expected to take at least six months to secure all regulatory and shareholder approvals for the deal to be finalised.
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