Santos Backs $30 Billion Takeover from Middle East Oil Consortium, Raising Eyebrows in Canberra and Adelaide
In a bold move with sweeping geopolitical and domestic implications, Abu Dhabi’s national oil company, through its investment arm XRG and Abu Dhabi’s sovereign wealth fund ADQ, have teamed up with US private equity titan Carlyle to launch a nearly $30 billion takeover bid for Santos — Australia’s second-largest gas producer and South Australia’s corporate crown jewel.
The proposed acquisition, which offers shareholders $8.89 per share — a 28 per cent premium on the company’s most recent closing price — has sent Santos stock soaring 12.3 per cent. But it also triggered immediate political and regulatory scrutiny.
Treasurer Jim Chalmers confirmed he would seek advice from the Foreign Investment Review Board (FIRB) before making any decision, flagging that this is “potentially a very large transaction” with “national interest considerations at play.”
Santos, which traces its roots back to 1954 as South Australia and Northern Territory Oil Search, has evolved into a major ASX-listed multinational with strategic assets across Australia and Papua New Guinea, including the Cooper Basin, GLNG in Gladstone, the Narrabri Gas Project in NSW, and offshore projects in Western Australia. The company plays a critical role in domestic energy supply and export revenue, making the acquisition anything but a routine business deal.
South Australia Reacts
The South Australian government — acutely aware of Santos’s economic and symbolic significance to the state — has already sounded a cautionary note. Premier Peter Malinauskas warned the state will not hesitate to intervene if the transaction is “not in the interests of South Australians.”
With thousands of jobs, billions in state revenue, and control of vital energy infrastructure on the line, the Premier’s office is monitoring developments closely.
“There are serious questions to be asked about sovereign ownership of such critical assets,” said a state government spokesperson, noting that Abu Dhabi’s majority stake via a state-owned enterprise may have long-term implications for energy pricing, local employment, and investment decisions.
What’s on the Table
While the takeover remains non-binding and subject to multiple layers of scrutiny — including from FIRB, ASIC, the National Offshore Petroleum Titles Administrator (NOPTA), and overseas regulators in PNG and the US — Santos’s board has signalled it intends to unanimously recommend the offer to shareholders in the absence of a superior bid.
The board described the deal as “a compelling opportunity” to deliver value while potentially opening up new avenues for growth.
The consortium, for its part, is saying all the right things — pledging to retain Santos’s existing management, accelerate project development, and support local jobs and communities. But the optics of a foreign, state-owned oil giant assuming control of key Australian energy infrastructure has triggered anxiety in security and policy circles.
“This isn’t just about dollars and cents,” noted a Canberra-based analyst. “It’s about how comfortable we are with foreign governments controlling core elements of our energy security, especially in a volatile global market.”
Political Timing and Strategic Implications
The bid lands on Treasurer Chalmers’ desk at a particularly fraught moment. With tensions escalating in global energy markets, the Albanese government has been walking a tightrope between encouraging foreign investment and safeguarding national assets.
Australia’s gas sector has come under increased scrutiny amid climate concerns and looming shortages on the east coast.
The irony is hard to miss: just as the Albanese government champions a renewables-led energy transition, it now must consider whether to approve the takeover of a key fossil fuel producer by one of the world’s most powerful oil states.
Will a foreign fracking company act in Australia’s interest?
Despite the consortium’s assurances that it will act in the national interest, the proposed takeover has sparked outrage among Indigenous communities and farming groups who have long opposed Santos’s controversial gas expansion projects.
In the Northern Territory, Traditional Owners have fiercely resisted the company’s fracking activities in the Beetaloo Basin, citing threats to sacred sites and groundwater.
Farmers in Narrabri, New South Wales, have waged years-long campaigns against Santos’s coal seam gas plans, fearing contamination of the Great Artesian Basin and damage to prime agricultural land.
For these communities, the prospect of a foreign state-owned oil giant — backed by Wall Street capital — taking the reins of a company already accused of ignoring local voices, raises alarm bells about the erosion of land rights, environmental protections, and democratic accountability in the name of ‘national interest.’
What’s Next?
Expect weeks — if not months — of intense lobbying, political wrangling, and shareholder speculation. Analysts suggest rival bidders, perhaps from Asia or another private equity group, could emerge. The question is whether any of them can match the cash-rich, geopolitically strategic allure of a Middle Eastern oil sovereign fund.
Meanwhile, for Santos employees, gas consumers, and state governments invested in the outcome, the proposed sale marks the beginning of a new chapter — one that will test Australia’s investment rules, energy independence, and willingness to hand the keys of a critical industry to foreign hands.
Stay tuned. This one’s just heating up.
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