An Abu Dhabi-led consortium has pulled its $30 billion takeover bid for Australian oil giant Santos, thereby averting a critical decision for the Australian federal government on whether to support the deal.
The investment arm of the Abu Dhabi National Oil Company, XRG, cited “a combination of factors” for its decision in a statement released late Wednesday, but did not elaborate.
XRG had initially proposed a non-binding bid in mid-June, requesting several extensions to finalize its proposal, raising questions about its intentions to proceed. The company was required to submit a binding proposal by Friday.
The proposal would have transferred control of a significant portfolio of oil and gas assets, including substantial operations in Western Australia and the Cooper basin, and critical energy infrastructure in eastern Australia, to a foreign entity.
Santos, which also possesses a profitable stake in a Papua New Guinea liquefied natural gas project, had its board support the bid. However, it faced strong criticism from Australian unions. The deal would have required several regulatory approvals and would have been reviewed by the Foreign Investment Review Board, which advises the Australian treasurer.
Analysts noted that the consortium’s lack of a major Australian partner, such as a superannuation fund, was a significant drawback.
In its statement, XRG reported it was prepared to commit to the long-term production of energy in Australia, which would provide benefits to domestic gas consumers and enhance regional energy security.
XRG further stated, “While the consortium views the Santos business positively, various considerations collectively impacted its assessment of its indicative offer.”
This decision prevents Treasurer Jim Chalmers from a potentially complex diplomatic decision. Although a foreign takeover of the assets could raise concerns about domestic energy security, Australia maintains a strong trade relationship with the United Arab Emirates, which includes a bilateral free trade agreement.
Santos announced it had been informed by XRG of its withdrawal late Wednesday, stating, “The XRG consortium could not agree to acceptable terms to protect the value of the potential transaction for Santos shareholders, considering the likely extended timeframe to completion and the regulatory risk associated with the transaction.”
Source: https://www.theguardian.com/australia-news/2025/sep/18/30bn-santos-takeover-collapses-after-abu-dhabi-consortium-reconsiders-offer
