Santos FY23 Result | Climate Transition Analysis

Santos released its FY23 results and Sustainability and Climate Change report this week.

While there was more disclosure on Santos Energy Solutions, its emission targets and its transition strategy remain unchanged

Key findings

01

Santos’ strategy remains focused on growing oil and gas up to +53% (FY23 to 2040s) and building out a value chain for CO2 services, guiding to 10Mt CCS by FY30, 30Mt by FY40 and creating up to ~1.5 Mt of nature based projects through current projects.

02

Santos made minimal progress on reducing emissions as of June 2023 (latest data).

Scope 1 and 2 equity emissions reduced by 1% to June 2023 (-17% vs target of -30% by FY30). Scope 3 was 32.7 MtCO2e at June 2023 +9% from 2022, due to the addition of three new emission categories and a change in methodology used to estimate combusted emissions (now assumes ~27% of products are not combusted).

03

For the first time, financials for Santos Energy Solutions segment were disclosed, comprising of the “old” part of new energy which includes gas processing facilities along with lower carbon projects in development: Moomba CCS (completion 2024), pre-FID CCS projects (Bayu-Undan/Darwin and Reindeer/WA) and 5 nature -based projects.

Santos Energy Solutions reported EBIT of $212m, -8% on FY22, with EBIT transferred from gas processing at Moomba (~$100m in FY22) and WA (~$144m in FY22).

04

Santos provided new capex guidance for decarbonisation and low carbon (across segments), up to $3-$4.5 bn in the next decade, compared with the $170m spent in FY23 (+40% on FY22).