Both companies have seen their shares decline in recent months, and they are currently trading below the values assigned to U.S. oil companies.
Santos and Woodside are in early discussions for a potential merger that could create a global energy giant worth around $52 billion.
The merger discussions have been partly prompted by pressure from investors urging the board to consider a break-up.
The potential merger is also being driven by the rising demand for natural gas due to the Ukraine war.
Australian oil and gas companies, Santos and Woodside, are reportedly in early discussions for a potential merger. The talks, which are still in their preliminary stages, could result in the creation of a global energy giant worth around $52 billion. The merger discussions have been partly prompted by pressure from investors urging the board to consider a break-up. Santos CEO Kevin Gallagher has confirmed that the company is considering various options, including splitting off its LNG operations.
Woodside, which recently completed a merger with BHP's oil and gas business, is facing obstacles in obtaining final approvals for its Scarborough venture. The $11 billion Scarborough gas project of Woodside and the $4 billion Barossa gas project of Santos have faced protests and legal challenges from Aboriginal groups and environmentalists. These delays have raised concerns in Japan, a major buyer of Australian liquefied natural gas (LNG), about the reliability of LNG supply.
Both companies have seen their shares decline in recent months, and they are currently trading below the values assigned to U.S. oil companies. Analysts believe that the base case for Santos would be to keep the company whole but consider divestments unless a takeover proposal emerges. A merger could create value through cost savings and improved funding options for delayed projects. However, there is no certainty that a transaction will occur.
The potential merger is also being driven by the rising demand for natural gas due to the Ukraine war. Santos shares surged on news of the merger talks with Woodside, indicating the market's positive response to the potential deal.
The talks were partly prompted by pressure from investors urging the board to consider a break-up
Santos CEO Kevin Gallagher has confirmed that the company is considering various options, including splitting off its LNG operations
Woodside, which recently completed a merger with BHP's oil and gas business, is facing obstacles in obtaining final approvals for its Scarborough venture
Analysts believe that the base case for Santos would be to keep the company whole but consider divestments unless a takeover proposal emerges
The $11 billion Scarborough gas project of Woodside and the $4 billion Barossa gas project of Santos have faced protests and legal challenges from Aboriginal groups and environmentalists
The delays have raised concerns in Japan, a major buyer of Australian liquefied natural gas (LNG), about the reliability of LNG supply
Pressure to simplify the Australian oil and gas sector has already led to major mergers, and market speculation suggests that a merger between Woodside and Santos could be on the horizon
Both companies are currently trading below the values assigned to U.S. oil companies, and a merger could create value through cost savings and improved funding options for delayed projects
Accuracy
No Contradictions at Time
Of
Publication
Deception
(100%)
The article is straightforward and factual, with no apparent deception.
