A potential A$80bn ($52bn) merger of two of Australia’s largest oil and gas companies to create a national champion in liquefied natural gas reflects a harsh reality in the sector: without global scale, it is hard to remain relevant.
Woodside Energy and Santos said on Thursday they had opened talks over a potential deal. If completed, it would consolidate nearly all of Australia’s LNG sector into a single entity.
Talks are at a very early stage, according to multiple people with direct knowledge of the situation. They said the discussions were triggered by the need for both companies to increase their size as the market looks to consolidate and the risk of developing new projects increases due to cost, regulation and opposition to the industry.