Media release

Woodside and Santos merger discussions: Time for cool heads in the face of hurdles and complexity

The Australasian Centre for Corporate Responsibility​ (ACCR) is commenting on the proposed merger of Woodside and Santos.

Harriet Kater, Special Advisor at the Australasian Centre for Corporate Responsibility (ACCR) said:

“Whilst the confirmation of early stage discussions between Woodside and Santos has seen an explosion of commentary and speculation, it is important that cool heads prevail and to acknowledge that there are significant headwinds against a deal.

“There are material regulatory challenges to consider, especially considering the ACCC’s ongoing east coast gas inquiry, and the implications for Woodside’s role in the west coast domestic gas market.

“Should the response to competition concerns be to carve up Santos’ assets between a range of different companies, the deal will get exponentially more complicated.

“However we do acknowledge that these early stage discussions are happening at a time of consolidation across the global oil and gas sector, which is an expected, defensive strategy for an industry facing structural decline.

“Whether the deal proceeds or not, it is critical that fossil fuel company boards ensure they are governing in the interests of shareholder value rather than progressing high risk expansion strategies in a declining market.

“Previously released ACCR analysis has determined that at Woodside, returning capital to shareholders presents greater upside than pursuing its risky growth portfolio. The adoption of such a strategy may well appease the significant block of Woodside shareholders that remain aghast at the board’s responsiveness to their climate concerns.

“Regardless of how far these discussions progress, Santos is certainly motivated to show frustrated shareholders that options are being considered to improve share price performance, which has been persistently lagging, in part due the company’s failings over First Nations engagement for the Barossa project.”

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