Jim Chalmers faces a mission-critical national security test
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First on Santos' critical infrastructure list is the Cooper Basin that houses strategically important assets at Moomba in South Australia which are pivotal to the processing and transport of natural gas and ethane around the east coast of Australia.
Next is Santos' stake in Queensland's major LNG project, GLNG, supported by substantial underground storage facilities suitable for natural gas, ethane and carbon dioxide. Plus Santos is a big player in the Western Australian market.
Whether to entrust these assets to any foreign government is a big decision.
None of this should suggest that this bid by XRG – a subsidiary of Abu Dhabi National Oil Company and including Abu Dhabi Development Holding Company and US-based investment company Carlyle – is doomed to fail.
But the fact that Santos' shares have not risen to anywhere near the $8.89 share-offer price reflects both uncertainty and the length of time this deal will take until completion.
There is a conga line of other approvals this deal must pass through, including regulators from PNG and Alaska – where Santos also holds significant assets.
And everyone with the ability to block this deal will be looking to extract (or legally extort) some advantage.
The bidder has already committed to keeping the Santos name and its head office in South Australia.
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But that might be just the first of many hoops that need to be jumped through.
The Australian government could also demand conditions to aid the domestic gas market.
'This is a huge opportunity for Labor to extract domestic gas concessions and remedy their failure to impose [gas] reservation a decade ago,' according to Kavonic.
Kavonic also says pressure may be applied by the government to spin out some of Santos' domestic gas assets into a company controlled by Carlyle, which is the privately owned US member of the XRG consortium.
The only cohort that won't be playing politics with this deal is the Santos board and shareholders.
This company has had the 'for sale' sign plastered on it for so long that it's faded in the sunlight.
Plenty of tyre-kickers have come and gone, and experts reckon that the current bidding consortium is the only party left in the auction room.
This represents the third overture this year – with the first two being rejected by the board for under-balling on price.
The new bid has landed at a price that Santos shareholders haven't seen in more than 10 years, so there is understandable excitement that their ship has finally come in.
Shareholders should be very happy with the job the Santos board has done to attract a party willing to bid against itself. It is what investment bank advisers dream about.
Now comes the arduous job of cutting deals with regulators that want to extract a few pounds of flesh.
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SBS Australia
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- SBS Australia
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Superannuation in Australia stretches back to the early 20th century, but there were no attempts to institutionalise universal compulsory contributions before the mid-1980s. In 1985, the Australian Council of Trade Unions, with the support of the then-Hawke government, presented a National Wage Case to the Conciliation and Arbitration Commission about a 3 per cent compulsory contribution for all Australian workers. The tribunal sided with the union in 1986 but ruled it as optional — subject to agreement between employers and employees. Five years later, in Keating's final federal budget as treasurer, the 3 per cent superannuation guarantee levy was made compulsory. It came into effect the following year, when Keating was prime minister, with the introduction of a superannuation guarantee charge to penalise employers who don't meet their contribution obligations. The mandatory rate then gradually increased to 9 per cent by 2002. 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The Advertiser
2 hours ago
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AU Financial Review
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The recent story, ' Why Sydney has been declared the steak capital of the world ', was both encouraging and dismaying to read as someone who raises the cattle behind those world-class steaks. It's incredible to see Australian restaurants like Rockpool, Margaret and The Grill being globally recognised. I'm proud of what our country's beef producers make possible. But as a farmer and business owner, I couldn't help asking the question many of us in the industry are thinking: If Sydney is the steak capital of the world, why are so many of the people producing that beef still under financial pressure or leaving the land altogether?
