The Australasian Centre for Corporate Responsibility (ACCR) is responding to the Federal Court decision in Munkara vs Santos, in relation to the legal challenge by Tiwi Traditional Owners to Santos’ approval to lay its Barossa gas export pipeline.
The court has dismissed the Tiwi Islanders’ claim.
Commenting on the ruling by Justice Charlesworth, Alex Hillman, Lead Analyst at the Australasian Centre for Corporate Responsibility (ACCR) said:
“While today’s court ruling may clear the way for Santos to restart its Barossa project after 16 months of delay, it leaves a colossal haemorrhage of shareholder money in its wake.
“We estimate that Santos’ regulatory delays could have cost the Barossa project $800 million.
“It remains to be seen whether the decision today addresses mounting investor concerns about Santos’ share price and the optimal structure for maximising shareholder value.
“Barossa has been tripped up by a number of legal challenges. For a company that operates in a highly regulated sector, Santos has evidently struggled with navigating regulations.
“Santos’ board is dangling a $6 million carrot in front of the CEO to deliver new projects, but Santos’ largest project has been beset by repeated problems.
“Investors should be asking serious questions about the governance of a company which has faced repeated legal challenges from local communities and Traditional Owners, not only at Barossa but also at Narrabri.
“Today’s decision does not mean it is all smooth sailing for Santos. FID on the Narrabri Gas project has recently been pushed back another year to 2025. The associated Hunter Gas Pipeline is facing opposition from local landholders and a reassessment under Commonwealth environmental laws.
“Recent court challenges of offshore project consultation processes have turbocharged an industry push to overturn social and environmental regulations deemed “workable” by the full Federal Court.
“It is expected that shareholders will continue to monitor the advocacy of companies like Santos and Woodside in the interests of ensuring consistency between the companies’ published policies and standards on one hand, and their actions on the other.”
The $800 million estimate is based on $1 million per day in standby fees payable for the pipelay vessel from Jan 2023 when drilling was meant to start, and $1 million per day for the drill rig, which had to cease work in September and has only recently been remobilised.