The Australasian Centre for Corporate Responsibility (ACCR) is responding to the announcement of the agreed merger between Santos and Oil Search.
Dan Gocher, Director of Climate & Environment at the Australasian Centre for Corporate Responsibility (ACCR) said:
“The proposed merger between Santos and Oil Search compounds the companies’ stranded asset risk into a single entity that faces a very uncertain future.
“The writing is on the wall, the stranded asset risk is very clear, and still, we have two major oil and gas companies digging themselves and their shareholders into a pit that they can’t emerge from.
“New research from Carbon Tracker overnight concluded that the vast majority of planned Santos and Oil Search projects are inconsistent with a safe climate and are vulnerable to asset stranding in the face of escalating global decarbonisation efforts.
“Just yesterday, new research (published in Nature) found that oil and gas production should have peaked globally in 2020, and must decline at ~3% per annum to 2050 for a 50% chance of limiting warming to 1.5°C.
“Earlier this year, the International Energy Agency (IEA) ‘Net Zero by 2050’ report concluded that there should be no further development of new or expanded coal, oil or gas reserves if we are to limit global warming to 1.5°C.
Prior to the demerger, Santos was planning to increase production from 89 mmboe to 120 mmboe by 2025-26, through the development of major growth projects including Barossa, Dorado and Narrabri. Similarly, Oil Search has significant growth plans in Alaska and PNG. None of these projects are consistent with a 1.5°C pathway.
“ACCR has brought a claim in the Federal Court against Santos. It is the first court case in the world to challenge the veracity of a company’s net zero emissions target for being misleading, and a world-first test case in relation to the viability of carbon capture and storage (CCS) and the environmental impacts of blue hydrogen.”