Santos surges to record half-year profit on higher oil and gas prices

Australian energy giant Santos has reported a huge increase in half-year profit as the company continues to prosper from oil and gas prices driven higher by Russia’s invasion of Ukraine.

Santos, one of the nation’s biggest oil and gas producers, told shareholders on Wednesday that its underlying profit for the six months to June 30 had hit a record-high $US1.2 billion ($1.7 billion), four times higher than the same time last year.

The underlying profit result exceeded the average forecasts of most market analysts. Santos’ bottom-line profit of $US1.16 billion was more than triple the same time last year, and also beat expectations.

Santos shareholders would receive an increased interim dividend of US7.5¢ a share, the board said.

The bumper profit comes after oil, gas and coal prices worldwide have been spiking this year as Western countries shun Russian imports to starve Moscow of the revenue it needs to fund the war in Ukraine, intensifying competition for spare cargoes and deepening a global energy crunch.

Uncontracted Australian cargoes of liquefied natural gas (LNG), one of Australia’s biggest export commodities, have been selling in North Asia at elevated prices above $US40 per million British thermal units, which is nearly an all-time high.

Managing director Kevin Gallagher said a long-running global underinvestment in new sources of oil and gas was colliding with intensifying demand.

“We are seeing these issues play out in the significant shift in global energy policy towards energy security as a key priority,” Gallagher said.