Australia’s two largest energy companies confirmed Thursday that they’re in preliminary discussions to explore merging in a deal that could create one of the world’s leading LNG exporters.
Woodside Energy Group Ltd. and Santos Ltd. cautioned, however, that the discussions are in very advanced stages, but no deal is close to being reached. Both companies said the talks are part of ongoing initiatives to create more value for shareholders. They made the comments to address media speculation after the Australian Financial Review first reported the discussions.
Woodside has a market capitalization of $37 billion, while Santos has a market value of roughly $15 billion. The potential combination of the companies would follow other blockbuster deals announced earlier this year that are pending, including ExxonMobil’s $60 billion acquisition of Pioneer Natural Resources Co. and Chevron Corp.’s $53 billion purchase of Hess Corp.
Woodside has a global portfolio of assets in Australia, the Gulf of Mexico and Trinidad & Tobago. It operates the Pluto and North West Shelf LNG export facilities in Australia, which have a combined capacity of more than 21 million metric tons/year (mmty). Through the first six months of the year, Woodside produced 91.3 million boe/d of oil and natural gas.
Santos also boasts assets that stretch from North America to Australia. It operates the Papua New Guinea, Darwin and Gladstone LNG terminals, which have a combined capacity of 20 mmty. The company produced 45 million boe/d during the first six months of this year.
The companies said the merger discussions remain confidential, but they would update the market going forward in accordance with regulatory requirements.