Santos, the Australia-based oil company leading Alaska’s Pikka Project, extended merger discussions with the Abu Dhabi National Oil Company this Friday. The Santos ADNOC merger talks began months ago and were expected to conclude, but both sides announced negotiations will now continue for four weeks.
Santos confirmed that collaborative discussions and final due diligence remain ongoing, yet the parties have not finalized acceptable binding agreement terms. The potential $18.7 billion deal values Santos shares at $5.76, though stock prices fell 3.5% to reach a five-week trading low.
Investors are concerned that the extended timeline could undermine momentum, though analysts believe regulatory approvals remain the primary risk. Van Eck’s deputy investment director, Jamie Hannah, stated that the Foreign Investment Review Board remains the biggest challenge for takeover approval.
The Santos board announced it would unanimously recommend shareholder approval of a finalized agreement unless a superior competing offer emerged. Central to Alaska’s interests is the Pikka Project, in which Santos holds a 51% operating stake while Spanish company Repsol owns the remainder.
Santos describes the Nanushuk play in the Pikka Unit as one of America’s most significant conventional oil discoveries in three decades. The Pikka Phase 1 project is nearly 90% complete and marks the most important North Slope oil development in over twenty years.
Production will begin next year, and the new facilities are projected to produce 80,000 barrels of oil daily. In July, key processing equipment arrived at Oliktok Point, which Santos celebrated as a major milestone toward completing the Pikka project.
Santo Managing Director Kevin Gallagher emphasized the combined impact of the Pikka and Barossa LNG projects on long-term production growth. Together, these projects are projected to increase Santos’ output by 30% by 2027, strengthening returns and supporting shareholder stability.
