Australian oil and gas company Santos reaped the rewards of energy instability across the world to post a huge surge in profits in the first half of the year, prompting renewed calls for an oil tax. windfall profits be imposed on fossil fuel producers.
The energy giant on Wednesday reported record production, earnings and cash flow and a 300% rise in underlying profit in the six months to June 30.
Santos chief executive Kevin Gallagher told investors the world has changed since the company’s last report in February, with Russia’s invasion of Ukraine driving inflation, disrupting markets and causing volatility in stocks. oil and liquefied natural gas prices.
“There has been a significant shift in global energy policy towards energy security as a key priority,” he said.
Greens leader Adam Bandt said the results showed Australia being ‘taken for a ride’ by ‘super profitable billionaire corporations making huge profits and sending them overseas tax free’ . He called on the Albanian government to impose a windfall tax on the gas industry in its first budget in October.
“When a nurse pays more tax than a multinational, something is wrong,” he said. “The next budget must fix Australia’s broken petrol tax.”
Mark Ogge of the Australia Institute said consumers should be upset that their energy bills have skyrocketed when the cost of gas generation in Australia was largely unchanged. He said a windfall tax was “an economically responsible and fair way to undo some of the damage Santos and other LNG producers have done to the Australian economy.”
Treasurer Jim Chalmers has repeatedly said the government is not considering a new tax on super-profits from the gas industry after calls from Nobel Prize-winning economist Joseph Stiglitz, the Grattan Institute and d other groups.
Santos reported half-year net profit after tax of A$1.66 billion (US$1.167 billion), up 230%. Its underlying profit was A$1.8 billion (US$1.267 billion), up 300%. The company’s average realized price for gas sold to Australian consumers on the east coast rose 22% to $6.49 per gigajoule.
After a merger with Oil Search completed in December, Santos operates in Australia, Papua New Guinea, the Himalayas and North America.
Gallagher announced that a final investment decision has been made to proceed with the Pikka Phase 1 oil project in Alaska at a higher cost than originally anticipated.
He said Pikka would be “net zero from first production” because the company would fund carbon offset projects and use carbon capture and storage. Activist group Market Forces said this was misleading because it only referred to Scope 1 emissions – those released directly at the production site – and not Scope 3 emissions released when the oil was burned elsewhere after have been sold.
Will van de Pol, a Market Forces activist, said:
“This decision by Santos to pursue Pikka is another example of the company burning our long-term future.”
Gallagher said the company has postponed an investment decision on its Dorado oil and gas discovery project in the Bedout Basin off Australia’s west coast.
Asked about the controversial Narrabri gas project in New South Wales, Gallagher said the company was continuing with resource planning and assessment and seeking pipeline licenses, but would not commit significant capital until all approvals were completed. would not have been obtained.
“Narrabri is a very strong project [that] can provide affordable gas to NSW customers,” he said.
Gas is a fossil fuel that is often described as having roughly the emissions of coal when burned for energy, but studies have shown this to be an understatement.
Last year the head of the International Energy Agency backed scientific warnings that no new gas fields could be developed if the world were to limit global warming to 1.5C above global warming. preindustrial levels. UN Secretary General António Guterres has made the same argument.
In June, he said fossil fuel companies and the banks that fund them “have humanity at their throats.”