Santos Not in Favor of Restricting Australian Gas Exports

Oil and gas producer Santos believes calls to restrict Australia gas exports may be counter-productive.

“I would, however, sound a note of caution about recent calls for the reservation of some domestic gas resources exclusively for Australian industry. As reasonable as this may sound on the surface, such government intervention could prove counter-productive for both Australian industry and the nation,” company’s chairman Peter Coates said Thursday while addressing the annual shareholders meeting.

Coats said that there are abundant natural gas resources in eastern Australia, especially coal seam gas.

“There is no shortage of gas,” he said.

He added that the cost of extraction is increasing, as is the cost of processing and distribution.  

“A gas reservation policy will do nothing to change those realities. In fact, a gas reservation policy that doesn’t recognise the true cost of gas extraction could see gas left in the ground unavailable to anyone,” he added.

According to Coats the development of a large scale gas industry, driven at least initially by export opportunities, is the best path. He noted that this will ensure that Australia has sufficient gas production capacity to meet all demand, both domestic and export.