Santos’ 2024: 5% Production Drop, $5.4B Revenue, 26% Emissions Cut

Financial Performance and Operational Highlights

Santos Limited’s 2024 Annual Report outlines a year of mixed outcomes, with production volumes falling by 5% to 87.1 million barrels of oil equivalent (mmboe) and sales revenue declining 9% to US$5.4 billion. These decreases were primarily driven by lower realised prices for LNG and crude oil, alongside natural field declines in key regions such as Western Australia and Northern Australia.

Despite these headwinds, Santos reported a net profit after tax of US$1.224 billion, a 14% reduction from 2023, with underlying profit down 16%. The company’s disciplined low-cost operating model and strong operational execution helped sustain robust free cash flow of US$1.9 billion, enabling a total dividend payout of US$757 million to shareholders.

Progress on Major Projects and Carbon Capture

2024 marked a significant milestone with the successful commissioning of the Moomba Carbon Capture and Storage (CCS) project. Since its start-up in late September, the project has injected and stored 340,000 tonnes of CO2 equivalent, operating at full injection rates and positioning Moomba CCS as a cornerstone of Australia’s emissions reduction pathway.

Further development projects are advancing well, with the Barossa gas project 88% complete and on track for first gas in Q3 2025, and the Pikka phase 1 project in Alaska 74% complete, targeting first oil in mid-2026. These projects are expected to increase Santos’ production by more than 30% by 2027, significantly lowering unit production costs and supporting sustainable cash flow generation.

Emissions Reduction and Climate Strategy

Santos has achieved a 26% reduction in Scope 1 and 2 equity emissions since its 2019-20 baseline, representing 84% progress toward its 2030 target of a 30% reduction. Methane emissions intensity remains well below the Oil and Gas Climate Initiative’s target, with a 21% reduction since the Moomba CCS start-up.

The company’s Climate Transition Action Plan (CTAP) remains central to its strategy, aiming for net-zero Scope 1 emissions by 2040 and net-zero Scope 2 emissions by 2050. Santos has also set an ambitious carbon storage growth target to build a commercial carbon storage business capable of safely storing approximately 14 million tonnes of third-party CO2 equivalent per annum by 2040.

Governance, Risk Management, and Shareholder Returns

Santos’ governance framework integrates sustainability and climate oversight at the Board and committee levels, with clear accountability for managing climate-related risks and opportunities. The company maintains a strong balance sheet with net debt of US$4.9 billion and gearing at 23.9%, supported by hedging programs to mitigate commodity price and foreign exchange risks through 2025.

Capital expenditure increased 9% to US$2.9 billion, reflecting investment in growth and decarbonisation projects. The Board has introduced a capital allocation framework targeting shareholder returns of at least 60% of all-in free cash flow from 2026, once major projects are online.

Looking Ahead

As Santos approaches an inflection point with new production coming online, the company is well positioned to navigate the energy transition while delivering reliable, affordable energy and advancing its climate commitments. The successful execution of its CCS hubs and low carbon fuels initiatives will be critical to sustaining long-term value creation.