Australian independent Santos has outlined plans to focus on its best-performing and most profitable projects, including LNG projects and its Alaska North Slope oil tenements, while slashing spending on Australian domestic gas fields.
Santos will transform its Australian domestic oil and gas business to reduce capital expenditure (capex) and raise margins, chief executive Kevin Gallagher told an investor forum in Sydney on 26 May.
The company will focus on production in the Moomba Central fields area in South Australia state's onshore Cooper basin, maintaining throughput at the Moomba gas plant while deprioritising other Cooper basin fields, to save $300mn in capex between 2027-30 and $150mn/year thereafter.
The company will develop two profitable basins — in Alaska, where it is bringing its 80,000 b/d Pikka phase 1 oil field online, and in Papua New Guinea, where it holds equity in the proposed Papua LNG terminal which is due to reach a final investment decision (FID) in July-December this year. Santos took an FID on connecting new gas supply to the ExxonMobil-operated 6.9mn t/yr PNG LNG joint venture earlier this month.
Domestic prospects
The Adelaide-based firm has prioritised foreign projects in recent years, with Gallagher criticising the Australian government's position on the process for achieving offshore regulatory approvals during the Barossa pipeline court dispute.
Despite this it produced first gas at the Barossa LNG project earlier this year and said it had overcome commissioning problems that paused shipments of LNG between 26 February and 21 May, with the project now at 75pc of its planned 2026 production rates and targeting plateau production in mid-2026.
Santos plans to drill three appraisal wells in Australia's onshore Beetaloo shale gas subbasin from July, which it said may contain 430 tcf of undiscovered gas and could become a major source of LNG feedstock.
The company's other Australian upstream target is the Bedout subbasin offshore Western Australia (WA) where it has repeatedly deferred development of the Dorado phase 1 project — which was to include a 60,000 b/d oilfield, considered to be the largest undeveloped oil project in Australia. Santos will appraise the three wells for scale in 2027.
In carbon markets, the company said it would aim to achieve FID-ready status at its proposed 10mn t/yr Bayu-Undan carbon capture and storage (CCS) scheme in 2026.
The initial customer would be Barossa, with 2.3mn t/yr planned for sequestration in the former gas field between Australia and East Timor. But third-party CO2 volumes would be sought to commercialise the CCS project further, Gallagher said.
