XRG, the international investment arm of Abu Dhabi National Oil Company (ADNOC), has submitted a non-binding offer to acquire Australian energy firm Santos through a consortium it is leading.
The proposal is subject to confirmatory due diligence, regulatory approvals, and a binding agreement between the parties. The indicative bid, announced Monday, is the first public move by ADNOC’s XRG toward expanding its international upstream and gas portfolio via acquisition.
Santos, headquartered in Adelaide, operates oil and gas assets across Australia, Papua New Guinea and the US, with growing investments in carbon capture and storage, hydrogen, and low-carbon fuels. As of 2024, Santos had a market capitalisation of over AUD 22 billion and produced around 91 million barrels of oil equivalent annually.
The Santos board stated that it intends to recommend the offer unanimously, subject to customary conditions, including a price agreement, completion of due diligence, and shareholder approval. No valuation details were disclosed.
XRG’s bid aligns with ADNOC’s broader strategy to scale gas and chemicals capacity internationally, particularly in high-growth and energy-transition-linked markets. The UAE’s state oil company is one of several Middle Eastern national oil companies expanding overseas as part of long-term energy security and diversification mandates.
If successful, the deal could provide ADNOC with direct exposure to LNG supply routes into Asia and access to Santos’ planned decarbonisation projects. ADNOC is already a major player in LNG trading and has recently invested in blue ammonia production and carbon capture and storage (CCS) infrastructure in the UAE.
XRG’s consortium includes undisclosed partners. The proposal comes amid renewed global M&A activity in the energy sector, with companies focusing on gas-linked assets and transitional fuels in response to shifting demand in Asia and tightening emissions policies in Europe and Australia.
The Australian Foreign Investment Review Board and other regulatory bodies are likely to assess the bid, given the strategic nature of Santos’ infrastructure assets, including LNG facilities in Darwin and Queensland.
