Abu Dhabi’s state oil giant Adnoc has made a stunning $19 billion offer to acquire Australian energy company Santos, a move that highlights the growing tension between Australia’s climate commitments and its role as a major gas exporter. The proposed deal, which would rank among Australia’s largest ever foreign energy acquisitions, comes as the nation grapples with how to balance economic and environmental priorities.
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What the Deal Involves
The acquisition would give Adnoc control of several key Santos assets, including:
- The Darwin LNG plant, which supplies crucial energy to Japan and South Korea
- A major stake in PNG LNG, one of Asia-Pacific’s most important gas projects
- The emerging Bayu-Undan carbon capture site in the Timor Sea
Why It’s Controversial
The bid arrives at a sensitive time for Australian energy policy:
- The government has pledged to cut emissions by 43% by 2030
- Santos’ gas operations accounted for 5% of Australia’s total emissions last year
- Analysts estimate the deal could reduce Australian tax revenue by $200 million annually through transfer pricing
Stakeholder Reactions
Energy Security Advocates
“Blocking this risks gas shortages and higher prices for Australian manufacturers,” warned former Resources Minister Keith Pitt.
Climate Groups
“This would lock in decades of new fossil fuel development, blowing our climate targets,” said Climate Council CEO Amanda McKenzie.
Workers
Union leaders expressed concern about potential job cuts given Adnoc’s reputation for operational efficiency.
Global Implications
The deal would:
- Make Adnoc the fifth-largest LNG producer worldwide
- Potentially disrupt existing gas supply contracts with Asian buyers
- Invite possible counterbids from rivals like QatarEnergy
What Happens Next?
- November 2025: Foreign Investment Review Board assessment
- Early 2026: Competition regulator review
- Potential wildcard: Australian pension funds may form a consortium to make a rival offer
Market Impact
Santos shares rose 14% on news of the bid, while analysts suggested the offer price may need to increase by 10-15% to secure shareholder approval.
About This Situation
The proposed acquisition puts Australia at a crossroads, forcing difficult choices between maintaining its position as a reliable energy exporter and meeting ambitious climate goals. The decision could reshape not just Santos’ future, but the entire Asia-Pacific energy landscape.
Investors and policymakers will be watching closely as regulatory reviews begin in the coming weeks.