The leak wasn’t small. Documents revealed that a storage tank at the Darwin LNG plant had been seeping methane since 2006, at rates up to 184 kilograms an hour. For nearly two decades, it remained largely hidden, with regulators aware but the public and Northern Territory cabinet kept in the dark.
Santos inherited the problem when it bought the plant in 2020, but instead of fixing it, the company secured approvals to extend the facility’s life to 2050. When ABC News exposed the leak, the fallout spooked ADNOC, raising questions about transparency, governance, and environmental risk.
Interestingly, it is not the first time that a Santos deal collapsed. Merger talks between Woodside Energy (NYSE: WDS) and Santos collapsed in 2023 due to valuation gaps.
The common threads? Misaligned valuations, regulatory bottlenecks, shareholder resistance, and the weight of disclosure risks. In Australia, time is stretched by a web of reviews from the Foreign Investment Review Board, the Australian Competition and Consumer Commission (ACCC), and multiple tax authorities.
“Time kills deals, whether it’s a private M&A or public M&A, losing momentum is definitely a trend of the current M&A environment,” Lance Sacks, a corporate partner at Baker McKenzie, said for Reuters.
While ACCC pursues what the market considers an overreach, corporate regulator ASIC acknowledges the friction and is pushing reforms to make public and private markets more appealing.
Without a more straightforward path through regulation, Australia risks deterring global capital, which may be necessary to capitalize on the ongoing commodity cycle fully.
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