By Angela Macdonald-Smith
The determination of Australia’s two largest oil and gas producers to defy mounting concerns about the continued growth of fossil fuels and double down to become “mini-majors” in the sector could amount to their biggest gamble.
Between them, the transactions on the cards for Woodside Petroleum and Santos represent a combined $62 billion of market value. They will catapult both into the world’s top-20 producers of fuels that the United Nations’ top scientists and the International Energy Agency say must have the shortest possible future to help avert catastrophic climate change.
“It’s actually derisked from an investor point of view because of the synergies of them combined, it just gives them flexibility,” said Matt Haupt at Wilson Asset Management, which holds shares in Woodside, Santos and Oil Search.
“In 10 years; time, might we be having a different conversation? Potentially, but I think at the moment it’s definitely the right strategy.”
Read more in the Australian Financial Review.