Australian oil and gas companies Woodside and Santos are in merger talks
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Yesterday, December 7, Australian oil and gas companies Woodside Energy and Santos reported that they are in merger talks. The statement was made after information about the negotiations appeared in the media. The companies noted that negotiations are at an early stage, and their details will not be disclosed. If Woodside and Santos reach an agreement, it will create a company with a total capitalization of 80 billion Australian dollars ($52 billion), which will become the largest producer of liquefied natural gas (LNG) in the country. The deal will be Australia’s largest for several years.
Woodside’s capitalization is estimated at $37.3 billion, Santos – at $14.6 billion. The combined oil and gas production of Woodside and Santos last year was estimated at 260 million barrels of oil equivalent. As Bernstein analyst Neil Beveridge notes, the deal will create a company that sells 16 million tons of LNG annually, “which will have more leverage over buyers and the ability to optimize the portfolio of LNG assets based on the number of terminals.” However, due to the scale of the deal, the companies may have problems with regulatory approval.
With rising oil and gas prices recently, there have been quite a few mergers and acquisitions in the oil and gas industry. So, in October ExxonMobil acquired another American company Pioneer for $59.5 billion, and Chevron bought shale oil producer Hess for $53 billion. In 2021, Woodside itself bought BHP’s oil and gas division for about $13 billion.
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