Activist protest against Santos board runs out of gas

Santos' plans to increase gas production have been given a tick of approval by shareholders after a protest vote against the fossil fuel giant's board failed to eventuate.

Shareholder activist groups encouraged investors to vote down the re-election of chair Keith Spence and board pay at Thursday's annual general meeting over concerns about Santos' profitability and environmental impact.

The company is pushing ahead with several new gas and oil extraction projects, including the Barossa gas field off the coast of Darwin and the Narrabri gas project in northern NSW, which has drawn the ire of environmental groups.

Santos Chair Keith Spence.
Santos Chair Keith Spence survived a push to have him removed from the board.

Mr Spence told investors the Barossa project was now 70 per cent complete after costly legal delays, with first gas expected in the third quarter of 2025.

Santos' strategy to increase liquid natural gas production is essential to help the world decarbonise by providing a cleaner alternative to coal, said chief executive Kevin Gallagher.

He welcomed the Albanese government's manufacturing and clean energy investment plan, announced on Thursday, but said Santos would focus on building a resilient business model that does not rely on subsidies or handouts.

"That said ... to get the best impact for Australia to incentivise true transition, it needs to be technology agnostic and sector agnostic, to encourage every sector of the economy to decarbonise," he said after the meeting.

A major part of Santos' decarbonisation strategy is increased investment in carbon capture and storage (CCS). 

Santos CEO Kevin Gallagher at a conference.
Santos CEO Kevin Gallagher said the company is focused on building a resilient business model.

Mr Gallagher said the company's Moomba CCS project, which it claims will be able to store 1.7 million tonnes of CO2 per year, is months away from starting.

But critics have questioned the viability of CCS and claim increasing gas extraction will only accelerate carbon emissions and exacerbate global warming, while also damaging Santos' share price.

The Australasian Centre for Corporate Responsibility, which is suing Santos for alleged "greenwashing" over its CCS claims, says the company's high capital expenditure growth policy has resulted in "drastic underperformance compared to peers".

Ceasing all new projects and redirecting capital expenditure to share buybacks would create an additional $US1.7 billion ($A2.6 billion) in value, said executive director Brynn O'Brien said.

Despite the centre encouraging a protest vote against Mr Spence's re-election to the board, he was comfortably supported by 93.4 per cent of shareholders, at a time when companies are facing an increase in investor activism.

Will van de Pol, chief executive of environmental advocacy group Market Forces, said big investors were "wallowing in greenwash and failing to live up to their climate claims".

Market Forces was recently dragged into Santos' legal stoush with the government-funded Environmental Defenders' Office over its bid to block the Barossa project from going ahead.

The $US4.6 billion ($A7.1 billion) project was delayed by a legal challenge from the EDO, which claimed Santos failed to assess Tiwi Islander's submerged cultural heritage along the route of its undersea export pipeline.

The Federal Court eventually ruled in Santos' favour, slamming the EDO for confecting evidence and coaching witnesses.

Lawyers for Santos have subpoenaed four environmental groups, including Market Forces, to hand over communications with the EDO as the company attempts to recoup costs from its opponents.

Both Market Forces and Santos declined to comment on the legal proceedings.

License this article

What is AAPNews?

For the first time, Australian Associated Press is delivering news straight to the consumer.

No ads. No spin. News straight-up.

Not only do you get to enjoy high-quality news delivered straight to your desktop or device, you do so in the knowledge you are supporting media diversity in Australia.

AAP Is Australia’s only independent newswire service, free from political and commercial influence, producing fact-based public interest journalism across a range of topics including politics, courts, sport, finance and entertainment.

What is AAPNews?
The Morning Wire

Wake up to AAPNews’ morning news bulletin delivered straight to your inbox or mobile device, bringing you up to speed with all that has happened overnight at home and abroad, as well as setting you up what the day has in store.

AAPNews Morning Wire
AAPNews Breaking News
Breaking News

Be the first to know when major breaking news happens.

Notifications will be sent to your device whenever a big story breaks, ensuring you are never in the dark when the talking points happen.

Focused Content

Enjoy the best of AAP’s specialised Topics in Focus. AAP has reporters dedicated to bringing you hard news and feature content across a range of specialised topics including Environment, Agriculture, Future Economies, Arts and Refugee Issues.

AAPNews Focussed Content
Subscription Plans

Choose the plan that best fits your needs. AAPNews offers two basic subscriptions, all billed monthly.

Once you sign up, you will have seven days to test out the service before being billed.

AAPNews Full Access Plan
Full Access
  • Enjoy all that AAPNews has to offer
  • Access to breaking news notifications and bulletins
  • Includes access to all AAPNews’ specialised topics
Join Now
AAPNews Student Access Plan
Student Access
  • Gain access via a verified student email account
  • Enjoy all the benefits of the ‘Full Access’ plan at a reduced rate
  • Subscription renews each month
Join Now
AAPNews Annual Access Plan
Annual Access
  • All the benefits of the 'Full Access' subscription at a discounted rate
  • Subscription automatically renews after 12 months
Join Now

AAPNews also offers enterprise deals for businesses so you can provide an AAPNews account for your team, organisation or customers. Click here to contact AAP to sign-up your business today.

Download the app
Download AAPNews on the App StoreDownload AAPNews on the Google Play Store