Speculating About A Takeover Of Santos  

The Economic Times Of India has an article speculating that foreign oil majors may be eyeing Santos as a takeover target - BP, Shell eye Santos; China bid unlikely.

Global energy giants BP, Eni and Shell are eyeing possible bids for Australia's No.3 oil and gas firm Santos, which one analyst
valued at around $7 billion, but a bid from China looks unlikely, dealmakers say. Takeover speculation has swirled around Santos, which has a strong balance sheet and coveted liquid natural gas (LNG) prospects, since Nov 29 when a government cap on foreign ownership expired.

Its shares soared 16 percent on Dec. 8 after a media report said China National Petroleum Corp (CNPC), parent of PetroChina, may bid. But with Australia reviewing a raft of Chinese investments, including Chinalco's contentious $19.5 billion deal with miner Rio Tinto, alarm bells are ringing in Canberra that China Inc might end up owning too much of Australia before the global financial crisis ends. That makes a CNPC bid highly unlikely, dealmakers say.

"The Chinese realise they cannot succeed with a hostile bid," said a Hong Kong-based investment banker with direct knowledge of the matter. CNPC spokesman Liu Weijiang said he did not have any knowledge of the situation when contacted by Reuters. The banker added that BP, Eni and Shell are looking at Santos, but a formal process is not yet in place. "The hawks are swirling," the banker said. ...

Some analysts say BP is underexposed to LNG and Santos would help it build a portfolio to better rival its peers in the top tier of the oil industry. Eni is also a credible suitor, analysts say, with the Italian major having said it is keen to expand into Papua New Guinea for its gas potential. It is a partner with Santos in the Bayu-Undan LNG Project.