The Australasian Centre for Corporate Responsibility (ACCR) is commenting on Santos’ (ASX:STO) merger proposal with Oil Search (ASX:OSH).
Dan Gocher, Director of Climate & Environment at the Australasian Centre for Corporate Responsibility (ACCR) said:
“Santos is showing its true colours with this bid. Its climate commitments are tokenistic at best, and its primary focus is profiting from the further expansion of oil and gas production.
“In a market where we have seen fossil companies’ share price erode significantly - including AGL Energy and Woodside - investors must question the thinking of Santos’ Board to dive into more fossil fuel assets when the market signals are clear: their future is challenged.
“It beggars belief.
“Santos claims to be aiming for net zero emissions by 2040, yet it is seeking to acquire Oil Search, which has significant expansion plans through Papua LNG in Papua New Guinea and the Pikka oil field in Alaska.
“The International Energy Agency (IEA) ‘Net Zero by 2050’ report concluded that there should be no further development of new or expanded coal, oil or gas reserves if we are to limit global warming to 1.5°C.
“Santos has made little mention of climate change in its merger proposal announcement, claiming it can easily shift to hydrogen-based fuels - yet shows absolutely no pathway to this claim.
“Santos is planning to increase production from 89 mmboe to 120 mmboe by 2025-26, through the development of major growth projects including Barossa (FID announced March 2021), Dorado Phase 1 (FID targeted 1H 2022) and Narrabri (FID targeted 1H 2023). This merger proposal will only increase those production targets.
“Santos intends to rely almost exclusively on the unproven unicorn - its Moomba carbon capture and storage project to deliver its net zero emissions commitment by 2040. It continues to refuse to set targets for its Scope 3 emissions, which are by far the largest proportion of its carbon footprint.”
Both Oil Search and Santos committed to providing their shareholders with a vote on their climate transition plans at their annual general meetings in 2022, following shareholder resolutions filed by ACCR.
Santos equity share emissions (Mt CO2e)
Source: Santos Ltd, Climate Change Report 2021
Oil Search equity share emissions (Mt CO2e)