Santos’ remuneration report gets green light with Barossa LNG development 70pc complete
The energy group has avoided a push from some climate-focused investors to remove its chairman, securing overwhelming support from investors.
Santos has avoided a push from some climate-focused investors to remove its chairman, securing overwhelming support from investors, as the oil and gas giant revealed its centrepiece growth project is rapidly approaching completion.
At the company’s annual general meeting, just 6.6 per cent of votes opposed the re-election of chairman Keith Spence, while around 9 per cent of votes rejected the company’s remuneration report.
The vote came despite opposition from superannuation giant HESTA.
It topped an event during which chief executive officer Kevin Gallagher revealed work on Santos’ $5.4bn Barossa LNG development is now 70 per cent complete, and recent drilling tests have buoyed confidence that the project will make a substantial improvement in the company’s financials.
The LNG project is a cornerstone development in Santos’ plans to improve its share price that has been a point of frustration with shareholders, and the update from Mr Gallagher will be well received by investors.
“The first Barossa well has been completed and pleasingly, initial well flow rates are in line with expectations and carbon dioxide content is at the low end of the expected range,” Mr Gallagher said.
Santos has been deliberately mute on progress of the Barossa project in recent months after the development was hampered by a spate of legal challenges. By keeping quiet on progress, the company has hoped it would not be hit with legal challenges at the most inopportune times.
But, speaking to investors, the company said it is now drilling the second of six wells and work on the pipeline to transport the gas back to Darwin was nearly complete.
Mr Spence said the project was on course to deliver first gas by the third quarter of 2025.
The timetable was delayed by three months earlier this year as a result of two legal challenges against the development.
A Federal Court earlier this year rejected a claim the gas giant’s proposed 262km pipeline would cause irreparable damage to First Nations people and their sites, a ruling which came just weeks after the National Offshore Petroleum Safety and Environmental Management Authority gave the gas giant the green light to resume drilling.
Drilling was delayed more than a year as Santos was forced to consult with enough people, while work on completing a 262km pipeline was suspended for weeks as the Federal Court mulled the application launched by the Environmental Defenders Office.
Santos will receive damages for the failed application, though it is not clear whether the company will be able to lodge a claim for any losses outside of legal fees.
The victory has been lauded by Australia’s gas industry, which hopes the ruling will deter more legal challenges.
Australia’s LNG industry has been in the crosshairs of environmentalists, which have found success with claims projects have failed to consult sufficient Indigenous people.
Mr Gallagher had previously said Australia was in the midst of an “anti fossil fuels war,” as he urged policymakers to support gas as a transitional fuel.
Australia is moving rapidly to reshape its $2.5 trillion energy economy and wean off its fossil fuel dependency, but gas developers fear the fuel source is not valued and it risks regional energy security.
More Coverage
