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Santos to purchase ConocoPhillips’ Australia assets for $1.39 billion

14/10/2019
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Santos has entered into a deal for the acquisition of ConocoPhillips’ northern Australian subsidiaries with operating interests in the Darwin LNG, Bayu-Undan, Barossa and Poseidon projects.

Santos will purchase ConocoPhillips' Australian assets for $1.39 billion, with an additional $75 million due once a FID is made on the Barossa development
(Image via ConocoPhillips)

Santos will pay $1.39 billion (AUD2.05 billion) upfront for the assets, with a $75 million contingency payment due if a final investment decision (FID) is made on the Barossa development project - currently expected for early 2020. 

The company say that the acquisition is in line with their core asset growth strategy in long-life, low cost natural gas assets and strategic LNG infrastructure. It represents a 25% increase in their natural gas output.

Following the purchase, Santos will hold a 37.5% interest in Barossa and the Caldita field, a 56.9% interest in the Darwin LNG facility and Bay-Undan field, a 40% interest in the Poseidon field and a 50% interest in the Athena field. ConocoPhillips will retain a 37.5% interest in the Australia Pacific LNG project, as well as operatorship of the associated LNG facility. 

“This acquisition delivers operatorship and control of strategic LNG infrastructure at Darwin, with approvals in place supporting expansion to 10 mtpa, and the low cost, long life Barossa gas project,” said Kevin Gallagher, Managing Director and CEO of Santos in a statement.

“These assets are well known to Santos. It also continues to strengthen our offshore operating and development expertise and capabilities to drive growth in offshore northern and Western Australia.”

“As we have demonstrated following the acquisition and integration of Quadrant Energy into our offshore business, Santos’ low-cost operating model is creating opportunities for disciplined growth across Australia. We look forward to welcoming ConocoPhillips’ Australia-West employees to Santos and combining the two businesses to create one high performing team with a wide range of exciting career opportunities across Santos,”

Matt Fox, Executive Vice President and Chief Operating Officer of ConocoPhillips said:

“We are extremely proud of our work in Australia-West over the last 20 years. We are pleased that Santos recognises the value of the existing business as well as the opportunity to develop Barossa and thereby continue Darwin LNG’s operations for another 20-plus years.

“While we believe the Darwin LNG backfill project remains among the lower cost of supply options for new global LNG supply, this transaction allows us to allocate capital to other projects that we believe will generate the highest long-term value to ConocoPhillips.”

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Santos to purchase ConocoPhillips’ Australia assets for $1.39 billion - Time to read 3 min
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