Saudi Aramco and Abu Dhabi National Oil Co. have been separately studying potential bids for Santos Ltd., people with knowledge of the matter said, becoming the latest companies to show an interest in the Australian producer’s liquefied natural gas assets.
The stock rose as much as 6.5% in Thursday trading, hitting the highest level in more than two years. They were up 4.2% at the close in Sydney, valuing Santos at A$26 billion ($17.4 billion). The company’s languishing share price has led to several failed takeover attempts in recent years and spurred calls for it to break up its businesses.
State-owned Aramco and Adnoc have been conducting preliminary evaluations of Santos as a possible acquisition target, the people said, asking not to be identified because the information is private. The Middle Eastern energy giants are investing billions of dollars in natural gas, which is seen as an important bridge fuel in the energy transition, especially in Asia.
Aramco agreed last year to buy a minority stake in MidOcean Energy LLC, an arm of investment firm EIG Global Energy Partners that has interests in a number of LNG projects, for about $500 million.
Deliberations are ongoing, and the suitors haven’t decided whether to proceed with any proposals, the people said. Aramco could opt to team up with a partner if it moves ahead, some of the people said. Representatives for Aramco, Adnoc and Santos declined to comment.
In 2018, Santos rejected multiple offers from US-based Harbour Energy Ltd., while preliminary talks with Woodside Energy Group Ltd. broke down earlier this year. Some investors have urged the company to split its coveted LNG assets from oil operations in Alaska and its domestic gas business in Australia to cash in on higher valuations.
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