Australia energy giants Woodside and Santos in talks to create $52 billion gas powerhouse

Shares of Australia’s Santos jumped to a five-week high on Friday, on news it’s in talks to merge with Woodside Energy.

Santos and Woodside Energy, two of Australia’s largest oil and gas producers, have opened talks to discuss a potential merger in what could create a A$80 billion ($52 billion) oil and gas behemoth.

“Concurrently, Santos is assessing a range of alternative structural options with a view to unlocking value,” according to a statement issued by Santos on Thursday.

Shares of Santos spiked 11% in early trade on Friday while Woodside slipped 0.7%.

Santos, which has a market capitalization of around 22 billion Australian dollars ($14.5 billion), said during an investor briefing last month that it was working on options to lift its value. Woodside boasts a market capitalization of around A$57 billion (more than $37 billion).

Discussions are still at an early stage — in statements to the press, both companies emphasized there is “no certainty” the discussions could lead to a deal.

In June last year, Woodside merged with BHP Group’s oil and gas arm. Santos in 2021 acquired energy exploration company Oil Search, but a multibillion-dollar gas drilling project has been derailed by a court challenge.