Shareholders to turn the heat on Santos over gas plans

Jacob Shteyman |

Santos is facing a backlash from activist shareholders at its AGM on Thursday.
Santos is facing a backlash from activist shareholders at its AGM on Thursday.

Santos board members are bracing for shareholder backlash over the fossil fuel giant’s plans to increase gas production.

Shareholder activist groups will vote against the re-election of chair Keith Spence and board pay at the Adelaide-based company’s annual general meeting on Thursday.

Santos is pushing ahead with several new gas and oil extraction projects, including the Barossa gas field off the coast of Darwin and the Narrabri gas project in northern NSW, which has drawn the ire of environmental groups.

Critics claim Santos’ strategy will generate increased carbon emissions and exacerbate global warming, while also damaging its share price.

Santos Chair Keith Spence.
Santos Chair Keith Spence is facing a protest against his re-election. (David Mariuz/AAP PHOTOS)

The Australasian Centre for Corporate Responsibility, which is suing Santos for alleged “greenwashing” over claims it can reduce carbon emissions using carbon capture and storage, says the company’s high capital expenditure growth policy has resulted in “drastic underperformance compared to peers”.

“Under the direction of Mr Spence, the Santos board has failed to deliver a company strategy that maximises shareholder value,” ACCR wrote in an investor briefing ahead of the AGM.

“There have been a number of serious governance failings on Mr Spence’s watch, and questions about the board’s ability to hold management to account.”

Rachel Deans, senior gas campaigner at environmental advocacy group Market Forces, said Santos’ “misguided” oil and gas strategy has already cost shareholders, including super fund members, through significant underperformance.

“Big investors, including our super funds, need to be on the right side of history and use their votes to drive real climate action at Santos,” she said.

Market Forces was recently dragged into Santos’ legal stoush with the government-funded Environmental Defenders’ Office over a bid to block the Barossa project from going ahead.

The Federal Court eventually ruled in Santos’ favour after lengthy and costly delays to the project, criticising the EDO for confecting evidence and coaching witnesses.

Lawyers for Santos have subpoenaed four environmental groups, including Market Forces, to hand over communications with the EDO as the company attempts to recoup costs from its opponents.

Both Market Forces and Santos declined to comment on the legal proceedings.

A First Nations man with his face painted with a traditional pattern.
Tiwi Island Regional Council Mayor Pirrawayingi Puruntatameri is against Santos’ gas project. (Aaron Bunch/AAP PHOTOS)

Despite the court ruling against his favour, Tiwi Islands traditional owner Pirrawayingi Puruntatameri still opposes the project.

“We would like people to understand how the Barossa gas project will desecrate our cultural and spiritual connection to the sea, marine animals and the environment,” Mr Puruntatameri said.

Gamilaroi elder Dorothy Tighe similarly opposes Santos’ Narrabri project, which she says threatens the culturally significant Pilliga Forest.

Despite mixed earnings results in the last financial year, the Australian Shareholders’ Association has recommended investors vote in favour of all resolutions on Thursday.

The shareholder advocacy group says its conversations with Mr Spence “have confirmed his deep understanding of the industry and the company, his independence of thought and his capacity to lead and represent the board”.

AAP