predict a company like Royal Dutch Shell (pic) or ExxonMobil
will takeover Santos Ltd.
Woodside Petroleum Ltd has quashed talk of a $15 billion takeover
bid for Santos Ltd as analysts suggest the smaller company is more
likely to appeal to other predators.
Royal Dutch Shell or
ExxonMobil were more obvious candidates for a takeover of the
Adelaide-based company, analysts said on Thursday as Woodside and Santos
both denied media reports of a planned takeover.
executive Don Voelte told a conference in Perth the company did not
comment on market rumours "but I can also just tell you that there's
nothing to it".
"It's news to me," Mr Voelte said of the
speculation Woodside wanted Santos for exposure to the coal seam gas
Santos also denied any approach from Woodside in a
reply to an Australian Securities Exchange query about its share price
rise from $14.37 on Wednesday to a high of $15.05 on Thursday amid the
Santos shares closed 39 cents, or 2.71 per cent, higher
"Santos has not been approached by, nor is it aware of
any potential interest of, Woodside Petroleum Ltd other than the media
speculation," it said in a statement.
Some analysts were surprised
by the rumours, saying Santos was likely to be attractive due to its
13.5 per cent stake in the ExxonMobil-led Papua New Guinea liquefied
natural gas (LNG) project than its exposure to Queensland's booming
EL&C Baillieu Stockbroking resources
analyst Adrian Prendergast said Shell or, to a lesser degree, ExxonMobil
were more likely to target Santos.
"I wouldn't be surprised to
see the likes of Shell pursue it (Santos), instead of Woodside," Mr
Prendergast told AAP.
"PNG LNG is the best asset in the world.
think that would be the motivation (for a bid for Santos), to get
exposure to that."
Takeover plays by Shell - in addition to its
current multi-billion-dollar joint takeover bid with PetroChina for
CSG-to-LNG hopeful Arrow Energy Ltd - certainly seem likely.
chief executive Peter Voser said recently that Australia was central to
the energy giant's plans to increase its LNG capacity by about 40 per
cent in the next five years.
Shell was unsuccessful in its bid to
takeover its North West Shelf joint venture partner Woodside in 2001
after the federal government rejected the $10 billion foreign bid.
then, Shell has maintained its status as Woodside's largest shareholder
with a 34.27 per cent stake.
Woodside itself seems an unlikely
entrant to the CSG-to-LNG space, with Mr Voelte repeatedly making it
clear the company is focused on its conventional gas resources in
Western Australia and in the Timor Sea.
Not only does Mr Voelte
believe Woodside has enough of these assets to keep it busy for decades,
he has also been sceptical about the value of CSG-to-LNG.
Life resources analyst Gavin Wendt recently said the market had a better
appreciation for LNG derived from conventional gas, like Woodside's,
than LNG extracted from CSG.
This was because large-scale
CSG-to-LNG production had not yet been demonstrated in Australia.
Wendt also said PNG LNG was more advanced than the Queensland
The buzz around CSG-to-LNG reached new
heights on Wednesday when Britain's BG Group signed a $60 billion sales
contract with China National Offshore Oil Corp for product from its
Curtis Island CSG-to-LNG project in Queensland.
Santos said its
share price rise over the past few days was likely to be related to the
BG contract, which was trumpeted as Australia's largest-ever trade deal
between two entities.
Woodside shares reversed earlier losses on
Thursday to close six cents higher at $47.48.