Long Term Future of Santos, page-324

STO gets a mention in Treasurer media today in ref to inflation and gas price."energy interventions will take time" being very non specific in regards to actual energy costs and any numbers saying he will update updated forcasts . I am told general gist was that he believe gas companies need to do their bit in regard to pricing and that it is only a temporary measure.


Chalmers has called the inflation as unacceptably high and that action will be taken in budget.
Question to him was - what did he think about shell and other gas company record results released

Chalmers reply
Gas companies are doing incredibly well due to high prices due to war in Ukraine
I see gas industry as really important part of our ecconomy. I want them to be profitable . All we are asking by imposing the gas cap is that teh incredibly high prices tehy are getting on markets don't hollow out local industry or smash Australians in the process
It is self evident taht teh gas companies are doing well, we don't expect ther to be any anominity about teh decisive steps we took at end of last year .
They are doing well. We expect gas companie sto have a view about it and they do.
We are asking them to do something meaningful and temporary on behalf of the broader Australian ecconomy and it is my job to look at broader Aust ecconomy industry and how it all fits together . They have a different job and I respect it


Well all the above was said by Jim with the biggest smirk on his face you can imagine - not a good look IMO

He then closed down conversation and moved to next question as quick as he could

Well - Jim better remember the long term consequences you have created but nationalising local gas supply / price for a " temporary" period and the h reality that if future exploration and production is restricted along with pricing no company will bother if at any point they will first be asked to guarantee supply and bend over backwards to comply but later get blindsided after committing to supply that they have a price cap. There will be no smooth cheap transittion if heavy handed tactics for short term are overused . ACCC threatening $50 mill fines for not supplying gas under cap price when discussions are still underway is a pretty sad threat.

No one is talking about the inflationary cost fo inputs into producing gas - the other side of the equation.
No one is talking about the massive long term infustructure capital costs and scale of infustructure required to actually allow high intermittant margins

Shell has commented that it is unaffordable and inpractical to reverse the flow of gas from Queensland fields down the east coast to NSW and VIC to supply domestic demand and that is in the near future simply as NSW and VIC have had no exploration and fields ready to produce can't come online let alone with no security of knowing the industrial and political climate for nect 10-15 years to justify capital expenditure

So simply government doesn't understand that gas transport and infustructure is not free and also that companies will end up spending their $ on infustructure and exploration in countries and areas where government will have stability on rules and regs and not knee jerk solutions .

Damage to gas market already means Australians will forever pay more for their domestic gas due to producer insecurity and country risk.