How Santos Achieved a 42% Emissions Cut While Growing LNG Production in 2025

Financial and Operational Highlights

Santos Limited has delivered a resilient performance in 2025, despite a 25% decline in underlying net profit to US$898 million compared to the previous year. The company generated strong free cash flow of US$1.8 billion, enabling a total dividend payout of US$770 million to shareholders. Production volumes remained steady at 87.7 million barrels of oil equivalent (mmboe), with sales volume increasing slightly to 93.5 mmboe.

The company’s disciplined low-cost operating model continues to underpin its financial strength, with unit production costs falling 14% to US$6.78 per barrel of oil equivalent (excluding Bayu-Undan). This efficiency supports Santos’ ability to navigate volatile commodity markets and maintain investment-grade credit ratings.

Emissions Reduction and Climate Leadership

A key milestone in Santos’ sustainability journey is the achievement of a 42% reduction in Scope 1 and 2 net equity emissions compared to the 2019-20 baseline, surpassing the company’s 2030 target early. This progress is largely driven by the Moomba Carbon Capture and Storage (CCS) project, which safely stored 1.23 million tonnes of CO2 equivalent (CO2e) in 2025 and generated 907,872 Australian Carbon Credit Units (ACCUs).

Santos’ Climate Transition Action Plan (CTAP) remains central to its strategy, embedding decarbonisation across operations and advancing carbon management services. The company is actively developing CCS hubs in the Cooper Basin, Northern Australia, and Western Australia, alongside exploring low carbon fuels such as synthetic gas and hydrogen.

Major Growth Projects Progress

Operational progress on major growth projects is a highlight of the year. The Barossa LNG project became operational in 2025, supplying gas to the Darwin LNG plant and marking a significant expansion of Santos’ LNG capacity. Meanwhile, the Pikka phase 1 oil development in Alaska is 98% complete and on track for first oil production in the first quarter of 2026, expected to deliver 80,000 barrels per day at full production.

These projects are expected to drive a 25-30% increase in production by 2027 compared to 2024, providing a scalable platform for long-term value creation. The company also continues to advance the Narrabri gas project and appraisal programs in the Beetaloo Sub-basin, supporting future domestic gas supply.

Governance, Risk Management and Community Engagement

Santos maintains a robust governance framework with active Board oversight of sustainability, climate risks, and opportunities. The company’s risk management integrates climate-related scenarios and physical risks such as flooding, which impacted Cooper Basin operations in 2025 but were managed effectively to maintain production continuity.

Community and Indigenous engagement remain priorities, with increased Indigenous workforce participation reaching 3% and expanded cultural heritage programs. Santos invested over US$28 million in community initiatives, including through the Santos Foundation, supporting health, education, and economic development in regions where it operates.

Outlook and Strategic Focus

Looking ahead, Santos is positioned to sustain growth and deliver shareholder returns through disciplined capital allocation and operational excellence. The company’s strategy balances meeting growing energy demand with advancing decarbonisation and low carbon fuel development. While uncertainties remain in the energy transition, Santos’ diversified portfolio, CCS capabilities, and emerging low carbon projects provide resilience and opportunity.

Investors will be watching the ramp-up of Barossa LNG and the start of production at Pikka phase 1 closely, alongside developments in carbon credit markets and regulatory frameworks impacting CCS expansion.