The Issue
Santos’ takeover talks with the XRG-led consortium have given shareholders in the Australian-listed E&P hopes of a clean exit at a premium price. But with negotiations dragging on, regulators circling and environmental controversies flaring, the more urgent question is arguably what happens if the US$18.7 billion bid never closes. The Adelaide-based company has, after all, been “in play” for years. Merger talks with Woodside collapsed in 2024, rumored Saudi Aramco interest fizzled and private equity has long balked at the complexity of the portfolio. The approach by Adnoc’s XRG unit, Abu Dhabi sovereign wealth fund ADQ and private equity giant Carlyle stands out as the most serious and promising to date. But even if the current exclusivity period — recently extended until Sep. 19 — successfully yields a binding agreement, Canberra’s Foreign Investment Review Board could yet torpedo the deal.
Why Buyers Keep Passing By
Santos’ assets have proved awkward for most suitors. Its LNG stakes in Papua New Guinea are indeed considered compelling crown jewels, but Exxon Mobil’s potential preemption rights complicate any direct purchase. A full corporate takeover of Santos likely sidesteps these rights — although the US major has shown itself willing to legally test the efficacy of that understanding. Exxon operates the existing PNG LNG project, while TotalEnergies is managing the proposed Papua LNG scheme, which has experienced long delays, and is currently targeting FID in the first quarter of 2026.
