Trailer Magazine

ACCC clears the way for Quadrant acquisition

  • Posted on Friday 16th, November 2018.

The Australian Competition & Consumer Commission (ACCC) has decided not to oppose energy company, Santos’, proposed acquisition of oil and gas company, Quadrant Energy.

Santos and Quadrant are active in the production and supply of natural gas (and related condensate by-products) and crude oil in Western Australia. The parties also jointly own domestic gas processing facilities and associated fields at Varanus Island and Devil Creek.

The ACCC found after detailed investigation that it is unlikely that the proposed acquisition will result in a substantial lessening of competition in the supply of gas to domestic customers in Western Australia.

“The ACCC considers that a combined Santos/Quadrant will continue to face strong competition from a range of suppliers, including large LNG producers such as Chevron and Woodside,” said ACCC Chair, Rod Sims.

“Most market participants believe the Western Australian domestic gas market is currently oversupplied.

“While the demand-supply balance could tighten in future, the ACCC considers that the proposed acquisition will not have a significant impact on future gas prices.

“In Western Australia, gas exporters are required to reserve 15 per cent of their gas for the domestic market, so this should ensure that gas available for domestic customers continues to grow, and from a range of players,” he said.

In addition, the ACCC approached the relevant WA government departments and no concerns were expressed about the proposed acquisition.

Santos announced on 22 August 2018 the proposed acquisition of 100 per cent of Quadrant Energy for US$2.15 billion ($2.95 billion AUD) plus potential contingent payments.

Santos has advised that the condition precedent for completion of the acquisition of Quadrant has been satisfied with the ACCC decision not to oppose the acquisition.

Completion is expected to occur within weeks.

Santos Managing Director and Chief Executive Officer, Kevin Gallagher, said the Quadrant acquisition delivers increased ownership and operatorship of a high quality portfolio of low cost, long life conventional Western Australian natural gas assets which are well known to Santos.

“It is materially value accretive for Santos shareholders and advances Santos’ aim to be Australia’s leading domestic natural gas supplier,” said Gallagher.

“We already have very significant growth projects across our five core assets, and Quadrant’s recent oil discovery at Dorado is another exciting opportunity for us,” he said.

(Image: Santos Managing Director and Chief Executive Officer, Kevin Gallagher.)

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