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Summary

Local Oil Independents Must Expand Overseas

Speaking in Adelaide today at the annual conference of the Australian Petroleum Production and Exploration Association (APPEA), Santos Managing Director Mr John Ellice-Flint said, “Australian oil independents need to expand overseas to grow.”

However Mr Ellice-Flint said that Australian companies face tax disadvantages. “US companies can write-off Australian exploration spending against their US income. However, Australian companies cannot write-off overseas exploration against their Australian income. This disadvantages Australian companies in bidding for overseas exploration acreage.”

Over the past year there has been unprecedented industry consolidation, which has seen the disappearance of many well-known oil and gas independents in Canada, the United Kingdom, the United States and New Zealand.

“To survive and grow, independents have to add shareholder value. This means identifying niches anywhere they can to leverage their skills.”

While Australia provides a good breeding ground for many independents, companies need a balanced portfolio, which includes international opportunities.

He said that a healthy independent sector is good for Australia but healthy independents need to be able to compete offshore.”

For further information contact Graeme Bethune, General Manager Finance and
Investor Relations on (08) 8218 5157 or 0419 828 617.

Santos stock symbols: STO (Australian Stock Exchange), STOSY (NASDAQ ADR)