Santos, a major oil and gas company, has introduced a revised capital allocation plan, which aims to distribute at least 60% of its total free cash flow to shareholders starting from 2026.
This new strategy comes after a significant investment period to launch the Barossa and Pikka projects. These projects are projected to boost the company’s overall production by over 30% between 2024 and 2027.
Beyond 2026, Santos intends to return all free cash flow to shareholders through dividends or share buybacks, provided its gearing level falls below the target range of 15% to 25%.
In addition to this, Santos has set a goal to establish and operate a commercial carbon storage business.
This business aims to permanently store approximately 14 million tonnes of third-party carbon dioxide annually by 2040.
This target equates to roughly 50% of Santos’ 2023 Scope 3 emissions associated with the combustion and use of its products.
Relevant: Santos Fires Up 1.7 MMtpa Moomba Carbon Capture Project
Last month, Santos initiated its Moomba carbon capture and storage project, targeting the capture of 1.7 million tonnes of CO2 per year.
Santos’ CEO, Kevin Gallagher, explained that the updated capital allocation framework aligns with the company’s commitment to prioritizing shareholder returns as new production comes online.
Furthermore, Gallagher emphasized that the company’s new carbon storage growth target contributes to the global energy transition while creating new revenue opportunities for the business.
Read more: Santos Seeks Sustainable Oil Development In Alaska
