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Speaker 1: Well, as you have heard in the news over the

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Speaker 1: last couple of days, the South Australian Government is warning

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Speaker 1: that any takeover of domestic oil and gas giant Santos

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Speaker 1: by the Abu Dhabi National Oil Company must preserve the

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Speaker 1: state's economic interest, saying that they've got levers that they

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Speaker 1: can pull now. Santos, which was founded as the South

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Speaker 1: Australian and Northern Territory Oil Search Company back in nineteen

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Speaker 1: fifty four, has agreed to a thirty billion dollar takeover

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Speaker 1: from ANDOC, announcing the indicative proposal to the ASX on

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Speaker 1: Monday morning. Now, as we know, Santos headquarters are indeed

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Speaker 1: in Adelaide, but we have got significant interests here in

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Speaker 1: the Northern Territory as well, and the prospect of foreign

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Speaker 1: control has triggered some caution, not only from the South

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Speaker 1: Australian government, but from others just watching and wanting to

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Speaker 1: keep a close eye on things. Now joining us on

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Speaker 1: the line is Rick Wilkinson, the CEO of energy advisory

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Speaker 1: firm energy Quest. He's also held very rolls with Santos

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Speaker 1: over fourteen years. Good morning to.

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Speaker 2: You, Rick, Good morning Katie.

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Speaker 1: Lovely to have you on the show. Now Rick, it

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Speaker 1: seems as though these dealers looking like it could go ahead.

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Speaker 1: Under the deal, XRG and and DOC subsidiary would acquire

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Speaker 1: all of Santos's shares for a cash price of eight

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Speaker 1: dollars eighty nine, which represents a twenty eight percent premium

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Speaker 1: on the six dollars ninety six closing price of the

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Speaker 1: company's stock before the announcement. I mean, how likely is

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Speaker 1: it that it's going to happen.

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Speaker 2: Well, it's a very serious bid from my point of view.

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Speaker 2: Not every day you get more than thirty billion dollars

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Speaker 2: in cash offered for a company. Often it's complicated with

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Speaker 2: lots of shares and provisors. This is very simple. It's

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Speaker 2: the dollars to the shareholder and in that respect, and

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Speaker 2: it is that the industry normal premium of about thirty

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Speaker 2: percent over its normal price. So those two things means

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Speaker 2: that it's a very serious bid and right up there

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Speaker 2: with what would be considered highly likely to be successful.

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Speaker 1: What could the takeover mean for the Santos operations? Well,

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Speaker 1: you know, like right across Australia, but particularly for us

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Speaker 1: here in the Northern Territory.

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Speaker 2: Yes, there's a good question. Ad Aberdabi National oil company

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Speaker 2: is a very serious long term player. They've been around

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Speaker 2: for more than half a century. The beginnings are with

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Speaker 2: the large oil and majors in the Middle East. They

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Speaker 2: provide about twenty five percent of the UAE the United

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Speaker 2: Arab Emirates revenues, so they're extremely important to that part

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Speaker 2: of the world and underwrite most of the good things

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Speaker 2: that you see when you travel through Dubai or Abu

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Speaker 2: Dabi on an airline. So they're very competent operators. They've

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Speaker 2: been working with LNG, which is of course important in

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Speaker 2: the NT. They've been working with it for more more

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Speaker 2: than fifty years, so lots of experience in that respect.

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Speaker 2: They have very deep pockets in terms of cash to invest,

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Speaker 2: and they have a very long term view. So these

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Speaker 2: are not someone who's just kind of come in and

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Speaker 2: do a bunch of real quick things and flip it over.

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Speaker 2: In my view, that's less likely to be the case.

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Speaker 2: So that's what you want to hear from the Northern Territory.

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Speaker 2: So the two big important pieces of Sandos in the

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Speaker 2: Northern Territory of course Barossa, which is almost ready to

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Speaker 2: start up, and I think a key reason Adnock is

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Speaker 2: looking at Santos is for its LNG interest, so you

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Speaker 2: can be highly confident that they would want to support

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Speaker 2: and that for its life and perhaps see it grow.

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Speaker 2: The second area is of course the Beatleoo shale area,

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Speaker 2: and that's a new area for them.

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Speaker 1: And so in terms of you know, like this takeover

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Speaker 1: and why they would want to be doing business in

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Speaker 1: a st but also why Santos would want to sell.

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Speaker 1: I mean, when we have got these big projects that

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Speaker 1: are just on the horizon, why would Santos want to sell?

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Speaker 1: I guess it is for the money, but you know,

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Speaker 1: are there other reasons behind it?

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Speaker 2: No? I think it's a straight dollar question. When shareholders

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Speaker 2: look at Santos before this offer, they considered all of

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Speaker 2: the upside the history of the company, and that's what

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Speaker 2: determines the share price. So what abo AB is looking

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Speaker 2: at it and saying, well, it's worth that, but we

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Speaker 2: think we can add more value by investing in it

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Speaker 2: and growing it in other areas.

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Speaker 1: So Rick, from your perspective, I mean, you've worked for

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Speaker 1: Santos in various roles over the years. You now obviously

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Speaker 1: have your own company, but you have worked for them

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Speaker 1: in various roles. They've been proudly South Australian, but also

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Speaker 1: proudly Australian. Is it risky to have Santos go into

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Speaker 1: foreign hands.

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Speaker 2: Oh that's a digical one. Yes, as someone who's spent

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Speaker 2: a significant part of their life working with Santos, and

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Speaker 2: I share the view of you know, how nice it

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Speaker 2: was to see an Australians success story. But economics are

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Speaker 2: what they are, and if someone comes in and says

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Speaker 2: we can create more value by investing in the company

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Speaker 2: than the current ownership can, then you know, that's the

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Speaker 2: reality of it all.

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Speaker 1: And I understand that they will need to obviously gain

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Speaker 1: you know, a number of approvals for the deal to

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Speaker 1: go through, including from the Foreign Investment Review Board, the

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Speaker 1: Australian Securities and Investment Commission, the National Offshore Petroleum Titles

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Speaker 1: Administrator and others. So it doesn't sound as though it's

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Speaker 1: you know, it's it's like there's obviously a lot of

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Speaker 1: steps that still need to happen at this point.

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Speaker 2: Yes, you're quite right there, Katie. The Foreign Investment Review

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Speaker 2: Board can take very different points of view and ask

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Speaker 2: for special concessions before they wave it through. I'm sure

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Speaker 2: that the topic of supply of domestic gas will be

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Speaker 2: very important for them to make sure that there is

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Speaker 2: sufficient gas from this transaction to at least match whatever

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Speaker 2: the current commitments and even try and grow in a

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Speaker 2: gas available to the domestic market. So I would expect

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Speaker 2: to see some sort of concessions there which I think

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Speaker 2: could be doable.

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Speaker 1: Well, it sounds like it is. You know, it's obviously

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Speaker 1: going to be interesting to see exactly what plays out

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Speaker 1: and how it all works. I know the South Australian government,

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Speaker 1: for example, have said that they'll pull whatever levers and

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Speaker 1: needed to make sure the deal is beneficial for their state.

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Speaker 1: Do you think they're going to need to or could

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Speaker 1: this actually be a good thing not only for South

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Speaker 1: Australia but also for Northern Territory.

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Speaker 2: So the KeyPoint here will be what is adnoc's priority

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Speaker 2: is going to be in terms of investment and if

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Speaker 2: they make commitments to invest further in South Australia, there

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Speaker 2: is requirements to look at it see if they can

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Speaker 2: expand the Cooper base and find new plays, invest in expiration.

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Speaker 2: All of those things build the long term future of operations.

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Speaker 2: So that's sort of topics that would be coming up

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Speaker 2: between the South Australian Government and adnoc Well.

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Speaker 1: Rick, it's great to speak with you this morning. I

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Speaker 1: really appreciate your insight and having that discussion with us.

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Speaker 2: Lovely to talk to you, Okay, thank you, Katie, thank

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Speaker 1: You, thanks so much,