OPINION: Spare a thought for Santos, the leading Australian operator that has seemingly developed a knack for shooting itself in the foot at present.
First of all, it decided to suspend the Dorado offshore oil development just when it was on the verge of awarding major engineering, procurement and construction contracts.
Santos complained about cost inflation and supply chain challenges and, oddly, said it wanted to bring more gas into an already sizeable oil resource.
It grumbled about its preferred contractors having financial and capacity problems due to Covid, so it seems fair to question why Santos selected them in the first place when the market knew of their frailties.
The decision to postpone Dorado stole the wind from the sails of an exciting project, and the new Bedout basin petroleum province.
There is no guidance on when Dorado will return, and the word on the street is it could be a couple of years.
The large Barossa offshore gas project was the next misfire for Santos. Shortly after the operator had started drilling the production wells, an indigenous group won a legal challenge against the drilling operation, which led to it being suspended.
The indigenous group claimed it had not been properly consulted with by Santos during the environmental approvals process.
Santos said in response it had done no wrong, and complained of project approval uncertainty and that the Australian government should be reducing risk for trade and project investment. The operator has lodged an appeal that it expects to be heard in mid-November.
Santos will be hoping there are no more setbacks in its portfolio. Phase one of the Pikka project in Alaska is under way, and Santos has a couple of planned investment initiatives in Papua New Guinea.
It is also working on two carbon capture and storage projects, although one is linked to Barossa.
Dorado may have missed out this time around, but Santos dearly wants to make its mark with Barossa and the associated CCS project.
(This is an Upstream opinion article.)