Making progress: An entrance of Santos Place building in Brisbane. Positive news for the major expansion project at Santos comes a week after the firm revealed preliminary talks with Woodside Energy, over a potential A$80bil merger. — Bloomberg
SYDNEY: Australian oil and gas major Santos says it has received approval for a revised drilling plan at its US$4.3bil Barossa gas project, although the fate of a pipeline to take gas to shore remains locked in a legal dispute.
Santos was forced to stop drilling at the field roughly 285km off northern Australia in September 2022 after the Federal Court ruled it had failed to sufficiently consult indigenous people on the nearby Tiwi Islands.
Following further consultation, the National Offshore Petroleum Safety and Environmental Management Authority accepted the updated drilling proposal last Friday, Santos said in a statement yesterday.
Santos did not immediately respond to a request for comment on when it might resume drilling.
While there is a 30-day window to appeal the decision, it is likely the offshore regulator heavily scrutinised the proposal to reduce the risk of a legal challenge, Citi analysts said in a note.
Positive news for the major expansion project at Santos comes just over a week after the company revealed preliminary talks with its bigger rival, Woodside Energy, over a potential A$80bil merger.
Separately, Santos is awaiting a ruling on whether it can resume work on a key section of the pipeline that will take gas to Darwin for processing.
A court in November ordered work on part of the pipeline to stop until mid-January after a traditional landowner from the Tiwi Islands called for a halt to pipeline work until its impact on underwater cultural heritage was clear.
Despite the various challenges, Santos affirmed last month that it still expects to start producing Barossa gas in the first half of 2025.
However, a decision against Santos in January could set the project back over a year, Citi analysts said.
Santos yesterday also announced a feasibility study with JX Nippon Oil and Gas Exploration Corp and ENEOS Corp for a project to ship carbon dioxide from Japan to Santos’ carbon capture and storage facility at Moomba.
Santos is an oil and gas exploration and production firm with its headquarters in Adelaide. It owns liquefied natural gas, pipeline gas and oil assets. — Reuters
