ADNOC’s XRG and partners make multi-billion dollar move for Australian energy giant

Australian energy player Santos has received a final, non-binding indicative offer from a consortium led by XRG, a subsidiary of Abu Dhabi National Oil Company (ADNOC), comprising Abu Dhabi Development Holding Company (ADQ) and global investment firm Carlyle, to purchase all of its shares. 

The consortium proposes to purchase all of the ordinary shares issued by Santos for a cash offer price of $5.761 per share via a scheme of arrangement. Since Santos has 3.24 billion shares outstanding, the transaction value is projected to amount to approximately $16.7 billion.

Two other non-binding and indicative proposals were made by XRG Consortium under confidential deals in March, first for $5.04 and then $5.42 in cash per share, Santos reported.

Since the Australian firm’s board considers the latest offer to be fair and reasonable, it intends to unanimously recommend that the company shareholders vote in favor of the transaction, unless a superior proposal is made.

The board has agreed to provide XRG with access to confirmatory due diligence, whose completion is a condition for the transaction. Other conditions include the players entering into a binding scheme implementation agreement (SIA) following the completion of due diligence and receipt of customary regulatory and corporate approvals.

For its part, the XRG-led consortium said it aims to build on Santos’ legacy as a trusted and reliable energy producer, unlocking additional gas supply for the Australian company’s customers and strengthening domestic and international energy security.

If the deal goes through, the consortium intends to maintain Santos’ headquarters in Adelaide, brand, and operational footprint in Australia, and key international operating hubs. It will also work closely with the existing management team to accelerate growth and support local employment.

Furthermore, the consortium says it will invest in Santos’ growth and development of its gas and LNG-focused business to provide reliable and affordable energy and low-carbon solutions to customers in Australia, the Asia Pacific, and beyond.

In line with its low-carbon agenda, XRG wants to make future-facing investments in Santos’ carbon capture and storage projects, low-carbon fuels, other decarbonization initiatives, and leverage AI to drive efficiency and value across operations.

This comes on the heels of a floating production, storage, and offloading (FPSO) unit, BW Opal, operated by Norway’s BW Offshore, leaving Seatrium’s yard in Singapore to head to Santos’ Barossa field offshore Australia.

The Barossa project encompasses gas and condensate production from six subsea wells, which will be processed at FPSO BW Opal. Condensate will be exported via tankers, and natural gas transported via the Gas Export Pipeline (GEP) to Darwin LNG, which will be tied into the existing Bayu-Undan pipeline.