Santos boss warns on legal activism

Santos boss Kevin Gallagher says the company is “no orphan” in the regulatory challenges it faces at its stalled Barossa project, while suggesting delays may impact future investment decisions.

Santos hopes to have Barossa, off the coast of the Northern Territory, up and running by 2025 but was recently delayed from installing a seabed pipeline as a result of a federal court injunction.

The injunction extended a temporary halt to works through to mid-January and was imposed due to concerns from Tiwi Island Traditional Owners over impacts to areas of cultural significance.

Santos estimates the delays to work will cost it as much as $1 million per day.

Addressing the gas producer’s investor day, Mr Gallagher said the company was fully committed to delivering Barossa – currently 64 per cent complete – despite the regulatory hurdles it faced.

However, he said the uncertainty around the project’s status made it difficult to forecast the material impact of any delays, and highlighted that Santos was not alone in that journey.

“We’re not an orphan in this journey right now, the entire industry has caught up with us,” he said.

“We’re working together as an industry to talk to government and trying and get government to understand that this is much broader ranging than consultation.

“This is activism that’s found its way in to stop projects here in Australia, and we need regulatory and legislative fixes and order to be able to move things forward.”

Santos and Woodside have each been subject to legal challenges in recent times, with regulatory approval of seismic surveying the latter’s Scarborough project also overturned by the court in September.

In both cases Traditional Owners were represented by the Environmental Defenders Office, which receives funding from the federal government as well as some state and territory governments.

Federal resources minister Madeleine King told a forum in Perth last week that the government was looking to improve the speed and clarity of the regulatory approvals process, but that it was not solely to blame for delays to project development.

“No one needs to wait for government to tell them to do the right thing,” she said, in relation to Traditional Owner consultation.

Mr Gallagher said he did not mind changes to the legislation around project approvals, but that Santos could hold off future investment decisions in Australia until it had a clearer view of the landscape – including at its Dorado field off the WA coast.

“The problem we have is that we’ve got a couple of big projects in Australia right now that have been approved by the regulator and are now caught with these secondary approvals,” he said.

“For new projects, fine, if the rules are going to change then all of that is good – we won’t take FID on Dorado until we get through whatever the new system is going to be.

“Right now, it’s impacting projects that have had FID and we’ve got pretty frustrated partners, as well as ourselves, who are suffering as a consequence.”

Santos’ base production in Western and northern Australia is scheduled to decline in the coming years as its current fields deplete.

Barossa, exploration in the Bedout basin and the mooted development of Dorado are billed by Santos as opportunities to sustain production in the region.

Santos backed in the role of gas in fueling the transition to net zero, and said it was committed to decarbonising and developing carbon capture and storage projects – including those at Barossa and the Moomba project in South Australia.

First carbon injection at Moomba is expected in the first half of 2024.

On the investment front, Mr Gallagher said the company was frustrated with its recent share price performance. Santos shares have come off more than nine per cent over the past month.

Its shares were trading up 0.3 per cent at 10am AWST this morning.