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Santos is an Australia-based oil and gas exploration and production company. It provides oil and natural gas, including LPG, ethane, methane, CSG, LNG, shale gas, and condensate to consumers across the Asia-pacific region.

Santos is a leading independent energy company with one of the largest exploration and production acreages as well as a sophisticated-tech infrastructure. 

It is a low-cost energy source producer, producing oil and gas not only in Australia but also in North America, Timor-Leste, and Papua New Guinea.

File:Santos limited corporate logo.svg - Wikipedia

The company’s aim is to transition the world to a net of zero carbon emissions, in an affordable and sustainable way by utilizing Australia's natural gas resources.

Key Statistics From 2021 Highlighting Santos’s Success

Since its foundation in 1954, Santos has grown to be a leading oil and gas producer in Asia-pacific. But this journey has been full of ups and downs. Let’s take a look at it!


Santos Forms Successful Strategic Alliances

The context for Santos’ creation is set against the backdrop of the events immediately following the end of World War II.

Australia was looking to reduce its dependence on imported fuel, so there was increased interest in oil exploration following the discovery of deposits in Western Australia in 1953.

South Australia was identified as the region with the most potential for profitable oil deposits. Encouraged by this belief, Robert Bristow and his friend, Jony Bonython, began researching the region in the early 1950s.

In 1953, Bristow applied for an oil exploration license (OEL) and was initially awarded the OEL 7 by the Australian government and later acquired the adjoining OEL 6. The two OELs, comprising more than 500,000 square kilometers, were then transferred to a new company set up by Bristow and Bonython in 1954 - the South Australian Territory Oil Search (Santos).

In February 1955, Santos went public and initiated its oil exploration operations.

Santos Acquires Resources Through Strategic Partnerships

As a newly formed company, Santos needed to forge strategic partnerships to help enhance its oil exploration operations.

Even before Santos made its first oil discovery, its operations in South Australia had attracted a lot of attention and reinforced the region’s potential for oil exploration efforts. Dr. A. I. Levorsen - a renowned American petroleum geologist - also became interested in the exploration effort and decided to assist the company.

Levorsen was a valued addition to the company, and early on, he realized that Santos lacked the experience and financial resources needed to effectively carry out exploration operations in such a vast area.

Thus, Levorsen strived to arrange a partnership between Santos and Texas’ Delhi-Taylor Oil Corporation. With Delhi’s backing, Santos drilled wells in search of commercially viable quantities of oil, and uncovered encouraging geological evidence of oil and gas deposits in the region.

The new evidence attracted considerable investor interest in the region. Consequently, the French Petroleum Company invested AUD 800,000 in Santos thereby becoming one of its major shareholders.

Santos’ First Significant Discovery In 1963

Santos’ exploration efforts paid off in 1963 when the company made its first significant discovery of natural gas in the Cooper Basin.

By the early 1960s, based on geological evidence, Santos and Delhi concentrated their efforts in exploring the Cooper Basin. Finally, in 1963, they discovered their first commercially viable deposit of natural gas at Gidgealpa 2 with a flow of 3.2 million cubic feet per day.

Eventually, the Cooper Basin also yielded another major natural gas deposit at Moomba, and in 1966, the partners began exploiting the Moomba reserve.

Santos Signs Supply Contracts To Expand Its Customer Base

Following the discoveries, Santos expanded its focus from exploration operations to signing supply and sales contracts with various companies, thereby building up its customer base.

In 1966, Santos signed a supply contract with the South Australian Gas Company - the state’s gas marketing utility - and began construction of a pipeline connecting the Cooper Basin with Adelaide. In 1969, the pipeline was completed, and the company started selling gas to the South Australian Gas Company - its first customer.

Within the same year, another sales contract with the Electricity Trust of South Australia was also signed.

Source: See page for author, CC0, via Wikimedia Commons

While gas supply from the Cooper Basin flourished, Santos continued its exploration operations and soon discovered its first petroleum deposit in Tirrawarra in 1970. The deposits recorded a flow of 650 barrels per day. 

In 1971, Santos signed a contract to supply the Australian Gas Light Company in New South Wales. The contract prompted the construction of a new pipeline connecting New South Wales to Santos’ reserves.

Santos Expands The Range Of Its Operations Through Strategic Partnerships

Santos’ partnership with Delhi had provided it with the necessary expertise and resources to enhance its exploration activities but now, Santos was looking to shift its focus from exploration to expand the range of its operations.

In 1979, Santos and Delhi mutually broke up their partnership. Delhi opted to take over the exploration operations in the Cooper Basin while Santos assumed responsibility for the production and further development of the region’s oil and gas fields. For this purpose, Santos entered another partnership with the Cooper Basin Liquids Project.

The new partnership prompted the construction of an AUD 1.5 billion condensate production facility, pipeline, and port facility.

By 1983, initial shipments of condensates began, followed by crude oil, and by 1985, the facility was also supplying shipments of LPG. Thereby, Santos had successfully managed to diversify its operations and enter a new market.

Key Takeaway 1: Take Down Barriers of Entry Through Strategic Alliances

Santos’ first few decades in business were marked by a series of partnerships and contracts that allowed the company to unlock its business potential.

The partnership with Delhi-Taylor Oil Corporation helped Santos access the resources and expertise needed for its exploration ventures. Delhi’s support was crucial for Santos’ success in discovering oil and gas deposits in the Cooper Basin.

After successfully establishing its reserves, the company moved on to acquire customers through strategic supply contracts. It continued to expand its customer base over the years through such contracts.

Finally, Santos’ partnership with Cooper Basin Liquids Project diversified its operations and expanded its scope of business through the installation of new facilities and infrastructure, thereby allowing Santos to tap into new markets - i.e., shipping condensates, crude oil, and LPG.

These alliances were crucial for Santos’ survival and success and were the reason why the company was able to establish itself early on.

Santos Pursues Diverse Avenues Of Growth

By the early 1980s, Santos was well-established within South Australia due to its network of customers, thus, it began looking toward expanding beyond this region.

At the same time, Santos had begun acquiring other companies in an attempt to reinforce its business, unlock additional value, and tap into new markets and products.

Santos Accesses New Regions Through Acquisitions

During the 1980s, Santos acquired various companies, thereby gaining access to new regions and markets.

In 1984, Santos acquired Reef Oil and Alliance Oil Development. The latter had been active in the Otway Basin region and thus opened up the area to Santos.

In 1987, Santos acquired a majority holding in Vegas - a major producer active in the Cooper Basin since the 1960s. Within the same year, the company also acquired a majority of Latec Investments which gave Santos involvement in the Amadeus Basin.

Santos’ significance within the Australian petroleum market was highlighted when the company was appointed in charge of the production, development, and downstream operations of the Queensland oil and gas market.

Santos Makes Inroads Toward The Timor Sea

Toward the latter half of the 1980s, Santos began venturing into the international market, and the Timor Sea became its first target.

When Santos acquired Peko Oil, it gained holdings in the Timor Sea, as well as the United Kingdom and the United States, thereby also gaining its first offshore operations.

Santos further boosted its presence in the Timor Sea through its purchase of Elf Aquitaine Exploration Australia’s holdings. The acquisition also brought access to the Bonaparte Basin region.

These acquisitions focused on the Timor Sea were handsomely rewarded as Santos discovered a new major oil field at Talbot 1 in 1989. The site produced a remarkable 4,900 barrels per day. Encouraged by its success, Santos also launched production at the Challis field in the Timor Sea at the same time.

Santos Incorporates New Operations And Assets

Source: Glen Dillon, CC BY-SA 3.0, via Wikimedia Commons

Santos continued its active acquisition strategy to incorporate new assets and operations into its business throughout the 1990s.

These acquisitions helped reinforce its status as a leading company within the Australian petroleum and gas sector.

In 1993, Santos took over the upstream assets of the Australian Gas Light Company, acquiring production fields in Surat Basin, Denison Trough, eastern Queensland, and the Timor Gap.

The acquisition of two more companies - Parker and Parsley Australasia, and MIM Petroleum - provided Santos with production operations in Surat Basin, Cooper, and Ergomanga. These acquisitions also added offshore sites to Santos’ growing portfolio of assets, specifically in Papua New Guinea, Indonesia, and Western Australia.

In 1999, Santos acquired its first interests in Victoria - the onshore Otway Basin and the offshore Gippsland Basin. Through the construction of the Heytesbury gas processing facility, Santos sold gas directly to the Victorian market.

Santos Maintains An Organic Growth Strategy In Parallel With Acquisitions

Despite Santos’ concentrated efforts to expand the business through strategic acquisitions, the company remained dedicated to pursuing organic growth at the same time.

Santos’ organic growth comprised of discovering new oil and gas fields that increased output and expanding its customer base by forging supply contracts that enhanced sales.

In 1989, one of Santos’ sites in Papua New Guinea - the Elevala 1 - yielded the discovery of a significant liquids-rich oil field. Similarly, in 1994, two more oil fields were discovered in the Timor Sea, Elang and Kakatua, while the Undan gas/condensate field was discovered in the Timor Gap.

In 1991, Santos entered a historic agreement to sell gas across state borders from southwest Queensland to South Australian customers. Consequently, the completion of the new raw gas pipeline between Moomba and Ballera in 1992 served to extend the company’s reach into Queensland.

The following year, Santos signed a sales contract with ICI Australia for ethane concentrate prompting the construction of the ethane treatment plant and a dedicated pipeline from Moomba to Botany in New South Wales. 

Key Takeaway 2: Build A Hard-To-Emulate Coherent Strategy

Santos’ growth strategy, although diverse, was quite complimentary. Each move was carefully calculated so as to expand the company’s operation capacity and increase its sales.

The company strategically acquired access to important regions and took over valuable assets while also striking sales contracts and continuing exploration activities. Through this multi-faceted approach to growth, Santos was able to assume a leading position in the industry.

While acquisitions brought in new assets and operations, Santos utilized these assets to their full potential by generating value from them. It did so by either exploiting them for exploration operations and enhancing output or by connecting new markets to its sites all over Australia and internationally as well as increasing sales.

The company’s growth strategy during this time period effectively demonstrates the value of balancing organic and inorganic growth as both approaches can be used in a complementary way.


Santos Leads Australia’s Natural Gas Supply

At the turn of the 21st century, Santos articulated its ambition of becoming one of the leading energy groups in the Southeast Asian region.

To realize this aim, the company needed to reinforce the expansion of its operations into international markets while also maintaining its edge in Australia.

Santos Expands Internationally Through Strategic Acquisitions

In the early 2000s, Santos acquired various assets and operations that allowed it to expand its network internationally.

In 2000, Santos bought Shell Australia’s assets in the Carnarvon Basin followed by the acquisition of a 40% stake in the Evans Shoal gas field in 2001.

santos acquires shell australia

Santos’ acquisition of Esenjay Exploration provided the company with a significant presence in the United States. The company added to its assets in the US by acquiring Tipperary Corporation at the end of 2005.

However, a target market to tap into for Santos was the Southeast Asian region. To solidify its operations there, Santos ramped up its exploration activities in Indonesia and also bought into Premier Oil’s offshore exploration holdings in Vietnam in 2006. In 2015, Santos began producing LNG and shipped it to South Korea.

Over the years, these gains had brought Santos closer to its goal of becoming a Southeast Asian energy leader.

Santos’ Disciplined Operating Model Drives Growth

In 2016, Santos introduced its new growth strategy that needed to be underpinned by a refined operating model to further improve its value drivers.

The following year, the company debuted its disciplined operating model.

The new model was focused on maximizing free cash flow through the oil price cycle. It required each core asset to generate positive free cash flow at a particular level which was set as a criterion.

The company’s budgets across activities such as exploration, development, production, and marketing were to be approved only if the criteria were fulfilled.

In 2018, the company’s focus on operational excellence paid off, with Santos reporting a strong operating performance.

Santos Transforms Under Its New Growth Strategy

Under the imperatives of the new growth strategy, Santos simplified its business, reduced costs, and increased efficiencies.

In 2018, Santos prioritized debt repayment to restrengthen the balance sheet which gave the company the flexibility to acquire the low-cost, high-margin conventional assets of Quadrant Energy in Western Australia.

By 2019, the strategy yielded Santos a simplified and high-graded portfolio of five core long-life assets while the company had divested non-core assets. Moreover, the value accretive acquisitions delivered operatorship of low-cost, strategic domestic gas assets and LNG infrastructure.

The consistent implementation of the strategy led the company to report strong results in 2021. Santos reported record annual production, sales, revenue, free cash flow, and underlying net profit after tax.

In 2021, Santos announced its merger with Oil Search Limited effected by way of a scheme of arrangement. Accordingly, the company acquired 100% of the issued capital in Oil Search from Oil Search shareholders. The merger resulted in the creation of a regional champion of quality, size, and scale.

Santos Strategically Positioned For Success

In recent years, Santos has positioned itself in accordance with its vision of becoming a global leader in the transition to sustainable energy resources.

As the world shifts towards sustainable and affordable energy, Santos has chosen to initially focus on lower-carbon technologies in which it has a competitive advantage. Its infrastructure-led carbon capture and storage (CCS) strategy could potentially provide it with a storage capacity of around 30 million tonnes per annum.

Santos also plans to initiate the Moomba CCS project in 2022 which will be the world’s lowest cost CCS projects and also serve as a significant enabler in the transition to cleaner energy.

Essentially, Santos has now developed into a major Australian energy producer. Its portfolio is diversified, resilient, and well positioned to benefit from recovering commodity prices. As the world transitions to a lower-carbon future, Santos’ portfolio serves as a strong platform to deliver sustainable growth as well as shareholder returns.

Key Takeaway 3: Focus Means Dropping Irrelevant Strategic Initiatives And Divesting 

Santos was able to achieve numerous milestones in recent years because of its consistent growth strategy.

The strategic imperatives outlined by the new approach allowed the company to focus on identifying and enhancing its core assets. Santos’ portfolio greatly benefited from the divestment of its non-core assets and the gains were reflected in a stronger balance sheet as well.

Also, Santos’ strategy seamlessly incorporates its vision for the future and helps the company realize that vision through concerted efforts such as undertaking strategically aligned acquisitions and leveraging low-carbon technologies to prepare for the future.

Why Is Santos So Successful?

Today, Santos is a leading supplier of natural gas and aims to be a world-leading clean fuels company.

The company seeks to grow its clean fuels capability and achieve zero-emissions LNG, hydrogen, and other products through carbon capture and storage, nature-based offsets, energy efficiency, and the use of renewables in its operations.

Santos’ grand ambitions are underpinned by a diverse portfolio of high-quality natural gas, oil, and strategic infrastructure assets. Its disciplined, low-cost operating model makes the company resilient throughout the commodity price cycle.

Santos’ Purpose And Mission Statement

Santos’ purpose is to provide sustainable returns for its shareholders by supplying reliable, affordable, and cleaner energy to improve the lives of people in Australia and Asia.

The company seeks to play a constructive role in the energy transition by dedicating itself to achieving net-zero equity by 2040.

Who Owns Santos Today?

Santos Ltd. is an Australian oil and gas exploration and production company based in Adelaide, South Australia. The holdings of the top 20 ordinary shareholders account for 78.33% of Santos' overall voting power. Some of the key figures of the company are:

  1. HSBC Custody Nominees (Australia) Limited. An organization that operates as a bank, owns 32.73% of the company’s shares, which is worth $1,108,565,304.
  2. J P Morgan Nominees Australia Pty Limited, which is a service provider company also situated in Australia, holds 16.06% of Santos's shares, which amounts to $543,924,154.
  3. Citicorp nominees pty limited is a company that mainly operates in the Mining & Metals sector. It owns up to 10.07% of the company, which is equivalent to $340,974,756.

Santos’ Growth By Numbers




Total Revenue

$2.2 billion

$4.7 billion

Net Profit

$376 million

$946 million

Operating Cash Flow

$1.3 billion

$2.3 billion




Market Capitalization

$10.2 billion

$17.6 billion

What is Santos’ Strategy For Growth?

Santos incorporates a three-phase strategy to transform, build, and grow the business.

Through this strategy, Santos seeks to drive shareholder returns as it continues to focus on the exploration, development, production, and sale of natural gas.

  1. Transform

Santos incorporates a diverse and balanced portfolio of five core, long-life natural gas assets while reducing emissions across core assets.

It is on its way to becoming the lowest-cost onshore operator in Australia while boasting a robust balance sheet and is transitioning toward a disciplined, low-cost operating model.

  1. Build

Santos’ strategy is to develop low-risk, brownfields growth prospects across the core portfolio and pursue strategically aligned, value accretive acquisition opportunities.

It also seeks to leverage facilities and infrastructure operations strategic capability. Santos aims to build a focused exploration strategy around core assets and establishing an energy solutions business.

  1. Scale

The rationale behind this strategy is to execute and bring on-line growth opportunities across the core portfolio.

Santos is geared toward exploiting M&A opportunities to strengthen core assets and is also prepared to generate new revenue through low-carbon Energy Solutions projects.

Santos’ Vision For The Future

In its Vision 2025 statement, Santos declares its vision: to be Australia’s leading natural gas company.

Santos has also laid down strategic goals for itself that can help it realize its vision.

The company strives to reduce emissions and improve air quality across Australia and Asia by supporting the economic development of combined gas and renewable energy solutions.

It also seeks to become the leading regional LNG supplier as well as a leading regional supplier of premium low sulfur crude and condensate to its customers in Australia and Asia.

Moreover, the company also aims to be recognized as Australia’s safest, most reliable, and low-cost developer and operator of upstream and midstream oil and gas facilities and infrastructure.

Since Santos seeks to positively impact the lives of people, its vision also incorporates this idea. One of Santos’ goals is to contribute positively to the communities in which it operates by providing them with jobs, energy supply, and local partnerships.

In essence, the company seeks to holistically develop its people and culture to deliver on this vision.

Santos has grown from a company that lacked the resources to successfully conduct exploration operations on its own and relied on the support of its more experienced partner, to a leading safe, and sustainable Australian energy company. After making significant discoveries in the Cooper-Basin and Tirrawarra, Santos developed into a major Australian operating enterprise during the 1990s. By pursuing strategically aligned, value accretive, and diverse growth opportunities, Santos has cemented itself as a reputable energy pioneer. Through its three-tiered business strategy, Santos is perfectly poised to achieve its vision of becoming a global leader in the transition to clean energy.


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