Santos director Yasmin Allen expects more oil and gas mergers if energy players don’t build new revenue streams
Santos director Yasmin Allen warns that more mergers within the oil and gas industry are likely if companies don’t build new revenue streams, amid waning support from capital markets.
More mergers within the oil and gas industry are likely if companies don’t build new revenue streams, amid waning support from capital markets, warns Santos director Yasmin Allen.
Ms Allen also said fossil fuel companies had a responsibility to help their customers reduce greenhouse gas emissions.
“(Exiting) is the good company/bad company approach. BHP has decided to do that by selling to Woodside and I guess AGL has taken that same approach as well through their demerger,” Ms Allen said.
“But this may be just shifting the problem. It doesn’t solve it unless you think these assets will be better managed elsewhere.”
BHP earlier this month hastened its exit from fossil fuels, announcing a deal to sell its oil and gas assets to energy giant Woodside.
Instead of exiting, companies could work to transition and reduce overall emissions, Ms Allen said at the Governance Institute of Australia’s national conference on Wednesday.
“It is the responsibility, and this is my personal view, of fossil fuel companies to not only reduce their own emissions, but to help their customers transition. The largest emitters of co2 are not actually the energy companies, they are transport, concrete and agriculture,” she said.
“As fossil fuel companies our Scope 3 emissions are our customers’ Scope 1 and 2. And if everyone can get one and two right, we can make massive change globally.”
Energy companies had shied away from tackling Scope 3 emissions in favour of taking the easier route, but there was a business opportunity there, said Ms Allen, who joined the Santos board in 2014.
“It can be very difficult to know your end product’s use, so it‘s really hard to analyse your Scope 3 emissions into the sort of detail that we’d like.
“If you can offset the carbon at source through either carbon capture and storage, hydrogen, or renewables, then you‘re selling a completely different product.
“We’ve already seen green or blue LNG selling into Asia trade at a premium. So there are customers that really want that, they want the producers of energy, who are potentially the best served and the best able, with the new technologies coming down the pipeline, to help offset carbon,” Ms Allen said.
Carbon capture and storage would be a big part of the solution, she added.
“If we want to meet our Paris targets, we‘re really going to have to accept that we’re going to need all technologies, from renewables to sequestration, and that’s the way we’re going to solve some of these big issues,” she told the conference.
On shareholder activists, she said they had an important role to play.
“They mobilise capital, and they bring to the attention of management and boards, although I do think our attention it‘s (already) very much there. However, I think you do need to run on more of a platform than ‘I just want to close you down’.”
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