Santos racked up nearly $7bn in unconventional gas and LNG losses in 5 years
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Key Findings
Santos’s record of large write-offs likely to remain unblemished in latest annual reporting
Santos has been unable to fulfil its contractual obligations at its Gladstone (GLNG) joint venture
The Narrabri gas project suffers from very high production costs.
Gas from the Narrabri project will not bring down the price of gas.
Executive Summary
Santos has taken a series of write-offs on its wealth-destroying investments in the coal seam gas to liquefied natural gas industry since its inception in 2014. All up, its investments in the CSG to LNG industry have been a financial failure.
Its forthcoming annual company results should see further asset write-offs as the long-term outlook for oil, and therefore gas, prices weaken.
Santos has been unable to fulfil its contractual obligations at its Gladstone (GLNG) joint venture. The directors and management of Santos are promoting their Narrabri gas project as a way to bring down gas prices domestically. Narrabri will not bring down gas prices for consumers. The continued propagation of false hope by Santos will erode its social licence to operate.
Globally, some oil and gas companies are starting to make serious plans to operate in a carbon constrained world and are transforming their businesses.
To date Santos has only paid lip service to environmental and social governance (ESG) principles. It will be interesting to see if its 2019 annual report ushers in a change.
Press release: IEEFA update: Santos loses $7 billion in write-offs in 5 years
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