Santos achieved a record annual revenue of $US7.8 billion ($11.3 billion) in 2022, up 65 per cent from 2021, after the price it received for exporting gas soared due to Europe turning away from sourcing the fuel from Russia.
The 2022 full-year operational results released on Thursday are the first since a merger between Santos and Oil Search was completed in December 2021.
Santos chief executive Kevin Gallagher said its increased liquefied natural gas production from Papua New Guinea after the merger drove the Adelaide-based company’s performance.
“The LNG business is expected to remain strong, with energy security being a top priority for our trading partners in the region,” he said.
While money poured into the coffers of the Adelaide-based company in 2022 – free cash flow more than doubled to $US3.6 billion – it has faced operational problems.
Santos said the resumption of offshore drilling for its flagship $6.1 billion Barossa gas project north of Darwin that was stopped by the Federal Court in September was uncertain.
The court rejected environmental approvals Santos had received for the drilling because it had not properly consulted with some traditional owners of the Tiwi Islands.
Santos and other east coast gas producers are also under fire from consumers and the federal government over the availability of reasonably priced gas.
Gallagher said the average price Santos received for selling gas on the east coast was $US7.74 a gigajoule, less than half the revenue it received from exporting liquified natural gas.
“We remain committed to supplying the domestic market at reasonable prices. Average realised price for east coast domestic gas for the quarter was US$7.74/GJ, less than half the average realised price for LNG.
Over 2022, Santos received on average 33 per cent higher prices for gas sold on the east coast.
Santos’ domestic gas business in WA responsible for 27 per cent of production in 2022 has had significant production cuts at both its processing plants in recent months.
The John Brookes offshore gas platform that feeds the Varanus Island processing plant and has been shut since November due to gas leaking from a subset pipeline. Santos expects to restart production in late January or early February.
Santos’ 2022 production of 103.2 million barrels of oil equivalent was at the bottom end of its guidance.
It has cut 2023 guidance to 89 to 96 million barrels, down from 91 to 98 million barrels, citing lost production from John Brookes and a resultant delay in bringing the Spartan filed that also supplies Varanus Island into production.
Santos shares were down 15 cents or two per cent to $7.21 a share in late morning trading.
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Source: Thanks smh.com