|This article needs additional citations for verification. (August 2008)|
|Traded as||ASX: STO|
|Founded||18 March 1954|
|David Knox, CEO|
|Revenue||A$2.762 billion (2008)|
|A$1.65 billion (2008)|
Number of employees
Santos Ltd. is a large Australian oil and gas company. Its name is an acronym for South Australia Northern Territory Oil Search.
- 1 Operations
- 2 Incidents
- 3 Water resource use
- 4 Sponsorship
- 5 Fossil fuel divestment
- 6 References
- 7 Further reading
- 8 External links
Santos is Australia's largest domestic gas producer, supplying sales gas to all mainland Australian states and territories, ethane to Sydney, and oil and liquids to domestic and international customers. The company's core business was built on gas and oil discoveries in the Cooper Basin, predominantly spanning north-east South Australia and South West Queensland. These gas reserves are the main source of natural gas to Australia's eastern states. Santos is the primary venture partner and operator of natural gas processing facilities at Moomba (in South Australia) and Ballera (in Queensland), and pipelines connecting those facilities with Adelaide, Sydney, Melbourne, Brisbane, Rockhampton and Mount Isa.
It has made significant discoveries in the Browse Basin, off the northwest of Western Australia. On 22 August 2014 the company announced a major gas-condensate discovery at the Lasseter-1 exploration well in WA-274-P in the basin, in which Santos has a 30% interest in company with Chevron (50%) and Inpex (20%). It was the second major discovery by the company in the area in two years.
Santos also loads product onto small Cape vessels at Port Bonython in South Australia.
The company also participates in on- and off-shore oil and gas exploration and production ventures throughout Australia, in the Timor Gap, Indonesia, Papua New Guinea, India, Bangladesh, Egypt, Vietnam and Kyrgyzstan.
Santos has an interest in the Darwin LNG project, exporting liquefied natural gas to customers in Japan. It is also developer of the Gladstone LNG project in Queensland and is a partner in the PNG LNG project.
Santos's production for 2008 was 54.4 million barrels (8,650,000 m3) of oil equivalent. Earnings before interest, taxes, depreciation, amortizations and exploration expenses for the period was A$2.8 billion, representing after tax profit of A$1.65 billion. On 22 August 2014 the company said its oil production was at its highest level in six years. For the first half of 2014, Santos recorded sales revenue of $1.8-billion, an increase of 20% on the comparable period the previous year. Sales volumes rose by 5% to 28.9-million barrels of oil equivalent. As a result of the company writing-off its investment in a coal seam gas project in Indonesia, the 2014 first half profit being down 24% at $206 million.
Santos has engaged Adelaide-based consultancy Bespoke Approach to lobby the Australian Government and the State Governments of New South Wales and Queensland. Other lobbyists which have represented Santos include: Kreab Gavin Anderson (Australia) Ltd and Craig Emerson Economics.
Moomba explosions, South Australia
In June 2001, a pump exploded at the liquids pumping station killing Process Operator Colin Jeremy Sutton. Another worker received burns to the neck and hand. In the South Australian State Industrial Relations Court, Santos pleaded guilty to three counts that it had “failed in its most basic responsibility as an employer” by not ensuring its employees were safe from injury and risk to health. The company was fined $105,000. The magistrate said Santos had failed to supervise Sutton or train him in the use of an emergency shutdown device.
On January 1, 2004, an explosion occurred at Santos' Moomba processing facility. The blast was traced to the Liquids Recovery Plant (LRP), where an inlet manifold and a related flange weld both failed after corrosion by mercury. Mercury was released along with a cloud of flammable gases including methane, ethane, propane and butane. Workers saw the cloud and raised the alarm, shutting down the plant and evacuating to designated safety points. Some workers allegedly did not hear the emergency alarms. The gas cloud ignited on contact with a heating unit 150 metres away, and an explosion followed. The plant was seriously damaged.
Moomba workers who sought to remain anonymous told The Australian newspaper on January 5 that the company was running a “cowboy” operation, and that it was luck, not management that had prevented any loss of life. They also said that the emergency muster area was too close to the plant in the event of a major tank explosion.
Gas supplies to South Australia and New South Wales were interrupted, leading to down-time in the manufacturing sector and short-term rationing measures in both states while repairs were made. Santos spent $40 million on remedial action following the incident. In 2011, the South Australian industrial relations court ruled that 13 employees had been placed at risk due to critical safety shortcomings. These included an inadequate risk assessment which failed to identify the likelihood of plant failing due to liquid metal rendering it brittle. The company pleaded guilty to breaching the Occupational Health Safety and Welfare Act after a SafeWork prosecution and was fined $84,000.
Sidoarjo mud flow, Indonesia
In May 2006, the Sidoarjo mud flow disaster occurred in East Java, Indonesia. Controversy exists surrounding the probable cause of the disaster which has displaced approximately 10,000 people and covered villages, farms and industrial areas with mud. The eruption is ongoing, though since 2011 the rate of flow has reduced.
As of 2013, the contended probable causes are: drilling for oil and gas, an earthquake with its epicenter some 250 km distant or a combination of the two.
Santos owned an 18 percent stake in the project which was drilling in the area at the time, under the control of PT Lapindo Brantas and in partnership with private Indonesian oil and gas company MedcoEnergi (50% and 32% stakeholders respectively). Santos' stake in the project was sold to Minarak Labuan, the owner of PT Lapindo Brantas in December 2008. Labuan also received a payment from Santos of $US22.5 million ($A33.9 million) "to support long-term mud management efforts". The amount was covered by existing provision for costs relating to the incident. Santos had provisioned for $US79 million ($A119.3 million) in costs associated with the disaster.
Santos had stated in June 2006 that it maintained "appropriate insurance coverage for these types of occurrences".
Port Bonython groundwater contamination, South Australia
In May 2008, groundwater contamination was reported to the Environment Protection Authority (EPA) following detection at Santos' Port Bonython site, Spencer Gulf, South Australia. Hydrocarbons were found floating on and in the groundwater. 150 inspection wells were later established, and a 450m long cement bentonite wall was constructed 'to stop the further spread of contamination off-site' including to the marine environment. In May 2012, Santos reported declining rates of hydrocarbon recovery from groundwater extraction wells and claimed that their remediation efforts were working.
Jackson oil spill, Queensland
In May 2013, an uncontrolled oil spill was reported in Santos' Zeus field near Jackson in Queensland's remote south-west. The flow lasted 'almost a week' before international experts were able to contain it. The rate of flow was estimated at 50,000 litres per day.
Water resource use
Santos' activities draw significantly on available water resources. In 2013, the three jurisdictions in which Santos withdrew the greatest volume of water were Indonesia (12.5 gigalitres), Queensland (7.5 gigalitres) and South Australia (7 gigalitres). The company's water resource extraction and use is published in an annual Sustainability Report.
Santos sponsors many community activities, events, institutions and projects in jurisdictions where they operate commercially. In October 2014, The Advertiser claimed that Santos spends $10 million annually on South Australian community groups, events and institutions. Figures published in Santos' 2014 Sustainability Report state that $7,487,731 was spent on 'Community investment' in South Australia that financial year and $3,108,057 in Queensland. Other jurisdictions received between $5000 (South Korea) and $775,255 (Western Australia) and the total 'community investment' spent across all regions during 2013-14 was $13,217,617.
Recipients have included:
In South Australia
- Adelaide Symphony Orchestra
- Botanic Gardens of Adelaide
- Come Out Festival (2009) - People's Puppets Project, Whyalla
- OzAsia Festival
- RiAus - 5 million AUD foundation partner
- Santos Conservation Centre at the Adelaide Zoo
- Santos Stadium athletics venue
- Santos Tour Down Under UCI World Tour cycling event
- The Smith Family
- University of Adelaide - Australian School of Petroleum - 25 million AUD over 10 years
- Queensland Art Gallery - 1.5 million AUD over 5 years
- Santos GLNG Food & Fire Fest
- Queensland Police Service's Stay on Track Outback road safety campaign (2012-2014)
'Stay on track outback' controversy
In December 2014, photographs showing Queensland police vehicles featuring Santos company logos created controversy and pushed the topic of corporate sponsorship of police activity into the mainstream media. Santos contributed approximately $40,000 to the program. Queensland Police commissioner Ian Stewart described the vehicles as "PR vehicles that we use at shows, we use at expos, all of those sorts of things just as any PR machine would be used by a company or another government organisation."
Online activists referred to the sponsorship as a "conflict of interest" and "a bloody disgrace" with Stop Brisbane Coal Trains spokesman John Gordon calling for the logos to be removed. The Lock the Gate Alliance also spoke out against the deal. Spokesperson Drew Hutton stated that "Advertising a company like Santos, which is a big coal seam gas company in Queensland, on the side of vehicles of the police whose job it is to enforce the law - including I might add against protesters who don't like coal seam gas - is a really bad idea... Lock the Gate would not be able to sponsor a police car - nor should it. Neither should a company."
Santos responded by stating that the company was "proud to support a program that promotes safe driving and is saving lives in outback Australia." Queensland's Police Minister Jack Dempsey defended the program and its sponsors stating "The Queensland Police Service's 'Stay on Track Outback' is an award winning road safety program aimed at keeping communities safer and reducing road trauma in regional Queensland. It has been in place since 2012 thanks to support from a number of sponsors."
Fossil fuel divestment
In October 2014, the Australian National University sold its shares in Santos and several other companies in the nation's most reported case of fossil fuel industry divestment. Santos responded by claiming that gas is necessary in the state's future energy mix and The Advertiser published its economic value to the state. At the time it was reported that Santos employed 3500 people nationally, thousands of contractors and had a $13 billion market value.
Politicians expressing their support for the company included the Prime Minister Tony Abbott and Federal MPs Jamie Briggs, Christopher Pyne, James McGrath, Greg Hunt and Treasurer Joe Hockey. Several senior state ministers also spoke out against the decision to divest in South Australia and Queensland, including South Australian Treasurer Tom Koutsantonis. Former Liberal party leaders John Hewson and Malcolm Fraser both supported the University's right to choose how and where to invest its money.
The University's Chancellor Gareth Evans told Australian Mining “Neither I nor the vice-chancellor nor any other ANU council member to my knowledge has described Santos specifically as a ‘socially irresponsible’ company." In a letter to Santos CEO David Knox, Evans said the university regretted any embarrassment suffered by Santos over the decision to divest.
- "Santo Reports 2008 Fourth Quarter and Full Year Results". OilVoice. 2008-02-20. Retrieved 2008-04-19.
- "Santos". OilVoice. Retrieved 2008-04-19.
- "Higher interim dividend by Santos as oil and gas revenue rises". Australian News.Net. 21 August 2014. Retrieved 22 August 2014.
- "Lobbyist Information - Bespoke Approach". Register of Third-Party Lobbyists. Electoral Commission New South Wales. Retrieved 2015-04-29.
- "Client details: Santos Limited". Register of Lobbyists. Queensland Integrity Commissioner. Retrieved 2015-04-29.
- "Who is on the register?". Australian Government Register of Lobbyists. Australian Government - Department of Prime Minister & Cabinet. Retrieved 2015-04-28.
- "Santos fined over Moomba explosion". Herald Sun. 2011-08-22. Retrieved 2015-02-05.
- Bartizan, Paul (2004-01-21). "Explosion threatens gas supplies to two Australian states". World Socialist Website. International Committee of the Fourth International. Retrieved 2015-02-05.
- "Sidoarjo Mudflow Erupting at Slower Rate, but No End in Sight, Govt Says" Jakarta Globe 2011-05-09. Retrieved 2013-12-27.
- "Mud disaster -Santos no more liable,sells project stake" Industrysearch.com.au 2008-12-12. Retrieved 2013-12-27.
- Port Bonython - Menard Bachy Menard Bachy (2010-08-24). Accessed 2013-12-27.
- Further contamination at Santos' Port Bonython facility Environment Protection Authority (2010-11-18). Accessed 2013-12-27.
- "Santos says oil-leak clean-up working" ABC News 2012-05-09. Accessed 2013-12-27.
- "Santos confirms uncontrolled leak at oil and gas well in Queensland's remote southwest" News.com.au 2013-05-20. Accessed 2013-12-27.
- Sustainability Report 2013. Adelaide, South Australia: Santos Ltd. 2013. p. 39.
- Starick, Paul (2014-10-22). "South Australian Senator Sarah Hanson-Young waging campaign against Santos and fossil fuels". The Advertiser. Retrieved 2014-10-23.
- Sustainability Report 2014 (PDF). Adelaide, South Australia: Santos Ltd. 2015. pp. 52–53.
- South Australian Government - Environment Department "Botanic Gardens of Adelaide - About Us - Our Partners" Retrieved 2013-11-25.
- "Come Out Festival for Young People" Santos, South Australia (2009). Retrieved 2014-01-21.
- OzAsia Festival website (accessed 2013.11.01)
- RiAus.org.au Accessed 2014-01-22.
- "Establishing another champion of exploration and discovery" Santos Ltd (2009). Retrieved 2014-01-22.
- The University of Adelaide "Australian School of Petroleum | Sponsors" Retrieved 2013-11-2
- "Santos backs Queensland Art Gallery for five years" Santos (2009-11-24). Retrieved 2014-01-22.
- Egan, Geoff (2015-01-09). "Santos sponsorship above board: Minister". Sunshine Coast Daily. Retrieved 2015-01-09.
- Small, Stephanie (2014-12-08). "Anti-CSG group Lock the Gate angry Santos logo being used on Qld police cars". ABC. Retrieved 2015-01-09.
- Potter, Ben (2014-10-10). "ANU’s Santos blacklisting a disgrace and jobs threat, says Abbott minister". Financial Review. Retrieved 2014-10-23.
- Aston, Heath (2014-10-13). "John Hewson and Malcolm Fraser blast Liberals over ANU divestment backlash". Sydney Morning Herald. Retrieved 2014-10-13.
- Hagemann, Ben (2014-10-23). "ANU backpedals on divestment blacklist". Australian Mining. Retrieved 2014-10-23.
- Weidenbach, K. (2014): Blue flames, black gold: The story of Santos. Santos Pty Ltc. ISBN 9781921037399