Saudi oil giants Aramco and ADNOC have been conducting preliminary assessments of Australian energy firm Santos as a possible takeover target, according to a Bloomberg report. The news sent Santos’ shares surging 6.5% on Thursday.
Citing unnamed sources, the report stated that both state-owned Aramco and ADNOC have been looking into Santos as a potential acquisition, though no firm decisions have been made yet on whether to proceed with any proposals.
The sources also indicated that other potential buyers may also be interested in Santos, which has a market capitalization of $16.63 billion. However, industry analysts expressed skepticism about the likelihood of a deal materializing.
Santos, headquartered in Adelaide, has a diverse portfolio of oil and gas assets spanning Australia, Alaska, and Papua New Guinea. The company is particularly known for its liquefied natural gas (LNG) business, including its stake in the PNG LNG project.
In 2022, Santos produced 91.7 million barrels of oil equivalent and had proven plus probable reserves of 1,661 million barrels of oil equivalent as of the end of last year. Its major ongoing development is the Barossa gas project off northwestern Australia, which has faced delays and cost overruns.
Neither Aramco nor ADNOC have publicly commented on the reported acquisition evaluations. Santos also declined to address the media speculation, stating its standard policy of not commenting on such matters.