The Scoop
XRG, the global investment arm of Abu Dhabi-owned energy company ADNOC, is taking a never-say-never approach to Santos, the Australian gas supplier it attempted to acquire for $18.7 billion before walking away in September after protracted negotiations.
A person with direct knowledge of the talks told Semafor that XRG executives “still like the company” and haven’t ruled out revisiting the deal. The bid — Santos’ third under CEO Kevin Gallagher — fell apart after the Adelaide company “negotiated too hard,” the person said.
Santos, seen as a critical link to the growing Asia Pacific gas market, has faced turbulence since the failed takeover.
Its chief financial officer resigned last month after only a year in the role. In hindsight, XRG is glad to have stepped away and watched the “soap opera” play out, the person said. For now, both sides “need a break,” they added.
A spokesperson for XRG declined to comment.
Know More
Had the deal gone through, it would have vaulted Abu Dhabi into the ranks of the world’s top LNG exporters. XRG, which was launched last year, aims to hit 20 to 25 million tons of LNG capacity by 2035. A Santos deal would put ADNOC’s LNG output closer to Shell and ExxonMobil, Bloomberg reported.
QatarEnergy would still dwarf competitors, producing 77 million metric tons of LNG annually today and boosting output by 85% in 2027. Global gas demand hit a record in 2024, according to the International Energy Agency, and Asia Pacific economies are expected to drive half of the growth through the end of the decade.
Meanwhile, XRG has been snapping up stakes in gas and LNG assets, most recently agreeing to acquire a piece of the Southern Gas Corridor from Azerbaijan, a key supply link from the Caspian Sea to Southern Europe.
Step Back
XRG was formed to accelerate ADNOC’s dealmaking as Abu Dhabi — which presides over some 7% of the planet’s proven oil reserves — looks to diversify and integrate its energy champion through international acquisitions. In line with that strategy, the ADNOC subsidiary has three investment platforms: chemicals, gas, and energy solutions.
Following a board meeting in June, XRG changed the name of its third platform, formerly “low carbon energies,” to “energy solutions” to better describe the company’s strategy, which includes weighing opportunities linked to the surge in electricity needs from AI and the digital economy.