Santos and Oil Search merger climate vandalism of the highest order
The Australasian Centre for Corporate Responsibility (ACCR) is commenting on the agreed merger between Santos’ (ASX:STO) and Oil Search (ASX:OSH).
Dan Gocher, Director of Climate & Environment at the Australasian Centre for Corporate Responsibility (ACCR) said:
“The Santos and Oil Search merger demonstrates that neither company is serious about taking climate action, and that their only goal is to maximise oil and gas production at a time when climate chaos is raging across the northern hemisphere.
“This has to be called out for what it is: climate vandalism and greenwashing of the highest order.
“The merger announcement claims the combined company will have nearly 5 billion barrels of oil equivalent in 2P+2C reserves, and US$5.5 billion liquidity to ‘self-fund development projects’.
“Without any shame for blatant greenwashing, they also simultaneously claim to have ‘strong ESG credentials’.
“Santos is supposed to be targeting net zero emissions by 2040, yet it is now taking on Oil Search’s significant expansion plans through Papua LNG in Papua New Guinea and the Pikka oil field in Alaska.
“Santos intends to rely almost exclusively on unproven carbon capture and storage at Moomba to deliver its 2040 net zero target. But Santos has refused to set targets for its Scope 3 emissions, which are by far the largest proportion of its carbon footprint.
“The merged entity is set to become an ASX20 company, which places even greater responsibility on the investors in these companies to curtail their expansion plans.
“This merger is Kevin Gallagher’s $6 million growth bonus in action, demonstrating how important incentive structures are for facilitating a credible transition.
“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.”
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)