Santos Ltd (STO) 2012年年度報告「ASX」.pdf

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1、Santos Annual Report 2012AAnnual Report 2012The energy to deliverBKey Exploration Development Operations/production Processing and load-out facilityDetailed exploration maps are available on the Santos website .Percentage interests are provided in the Santos Group interests section of this Annual Re

2、port.Santos officesSantos Annual Report 2012CWorld of SantosRef LocationSite/AssetActivitySantos operatedProductAustrAliA1Carnarvon BasinMutineer-Exeter Stag,Barrow Island,Thevenard Spar,John Brookes,Varanus Island,Reindeer,Devil CreekFletcher FinucaneZola,Winchester Yes NoNoYes 3 of 9 permitsOilOil

3、Gas,condensateOilOil,gas2Browse BasinCrown,Burnside4 of 5 permits Gas,condensate3Bonaparte BasinCaldita BarossaTwo exploration permits NoYesGasGas4McArthur BasinFour exploration permitsYesOil,gas,condensate5Amadeus/Pedirka BasinsMereenie YesOil,gas,condensate6Cooper/Eromanga BasinsSouth Australia Mo

4、ombaSouth-west Queensland Ballera,JacksonOther oil assets YesYesNoOil,gas,condensate,LPGOil,gas,condensate,LPGOil7Surat/Bowen BasinsDenison,MahaloMoonieCombabula,Spring Gully YesYesNoGasOilGas8Gunnedah BasinNarrabri,BandoYesGas9Gippsland BasinKipperSole NoYesGas,condensate,LPGGas10Otway BasinCasino,

5、Henry,NetherbyMinerva YesNoGas,condensateGas,condensatelNG projeCts11Bonaparte BasinBonaparte LNGNoLNG12Timor Sea and Timor GapBayu-Undan,Darwin LNGNoLNG,condensate,LPG13Surat/Bowen BasinsGLNGYes*LNG14Papua New GuineaPNG LNGNoLNG,condensateAsiA15Papua New GuineaSE GobeHides,Barikewa NoNoOil,Oil,gas,

6、condensate16Papuan Basin,IndonesiaWarimNoOil,gas,condensate17East Java Basin,IndonesiaMaleo,Oyong,Wortel,Peluang YesOil,gas,condensate18South Sumatra,IndonesiaFour CSG licencesNoGas19Nam Con Son Basin,VietnamChim SoDuaBlock 13/03 NoNoYesOil,gasOil,gasOil,gas20Phu Khanh Basin,Vietnam123 PSCYesOil,gas

7、,condensate21Bengal Basin,BangladeshSangu/Block 16 YesGas,condensate22North East Coast Basin,India Two exploration permitsYesGas*Santos operates the upstream and has a 30%interest in the jointly held project company that operates the downstream.DAt Santos,delivering on our potential is more than a p

8、romise.It is a core value upon which the company is built.Our record of delivering strong results and robust projects provides a solid platform for years to come.About SantosAn Australian energy pioneer since 1954,Santos is a leading oil and gas producer,supplying Australian and Asian customers.With

9、 its origins in the Cooper Basin,Santos is one of Australias largest producers of gas to the domestic market and has the largest exploration and production acreage position in Australia of any company.Santos has developed major oil and gas liquids businesses in Australia,and operates in all mainland

10、 states and the Northern Territory.Santos also has an exploration-led Asian portfolio,with a focus on three core countries:Indonesia,Vietnam and Papua New Guinea.From this base,Santos is pursuing a transformational LNG strategy with interests in four LNG projects,including GLNG and PNG LNG.Our subst

11、antial pipeline of projects ensures Santos is well positioned to achieve our production goal of 80 to 90 million barrels of oil equivalent by 2020.With over 3,000 employees across Australia and Asia,Santos foundations are based on safe,sustainable operations and working in partnership with host comm

12、unities,governments,business partners and shareholders.Our valuesWe are a company that:Discovers by opening our minds to new possibilities,thinking creatively and having the courage to learn from successes and failures,to take on new challenges,to capture opportunities and to resolve problems.Collab

13、orates by recognising the value and power in diversity of thought and communicating openly to understand the perspectives of others;demonstrating leadership by sharing what we know and respectfully challenging each other to achieve the best results for all.Delivers by taking personal responsibility

14、and pride in our work to deliver timely,quality results that benefit Santos and help achieve our vision and strategy.Cares by taking the long-term view to build a sustainable future for our company,our people and the environments and communities.Santos Limited ABN 80 007 550 923This 2012 Annual Repo

15、rt is a summary of Santos operations,activities and financial position as at 31 December 2012.All references to dollars,cents or$in this document are to Australian currency,unless otherwise stated.An electronic version of this report is available on Santos website,Santos Annual Report 20121ContentsO

16、verview 2 Operating and financial highlights 4 Review by Peter Coates and David Knox 7 Our vision and strategy 8 Production and sales 10 Reserves and resources 12 Review by Chief Financial Officer 14 Delivering sustainablyManagement and governance 24 Board of Directors 26 Santos leadership team 28 C

17、orporate governance report 45 Organisation chartFinancial report and shareholder information 46 10-year summary 48 Directors report 58 Remuneration report 77 Financial statements 163 Independent audit report and independence declaration 165 Information for shareholders 168 Santos Group interests 171

18、 Index 172 Glossary 173 Major announcements made in 2012Business unit review 16 Eastern Australia 18 Western Australia and Northern Territory 20 GLNG 22 Asia Pacific24461621santos Annual Report 2012Cover:Taurai Masvingise,Environmental Advisor GLNG project.This page:Fletcher Finucane oil project in

19、the Carnarvon Basin,offshore Western Australia.2Operating and financial highlights20122011%changeProduction volume(mmboe)52.1 47.2 10Sales volume(mmboe)61.0 58.7 4Sales revenue($million)3,220 2,721 18EBITDAX(excluding asset sales)($million)1,869 1,597 17Net profit after tax($million)519 753(31)Under

20、lying net profit after tax($million)606 453 34Operating cash flow($million)1,658 1,253 32Earnings per share(cents)54.484.8(36)Dividends declared per ordinary share(cents)3030-Proved and probable reserves(mmboe)1,4061,3643sAles reveNue$3,220 million18%eBitDAX (excluding asset sales)$1,869 million17%p

21、roDuCtioN 52.1 mmboe10%PRODUCTION VOLUME52.1 mmboe 2008200954.454.42010201149.947.2201252.1SALES VOLUME 61.0 mmboe2008200955.860.12010201159.258.7201261.0Production increased 10%,driven by new producing assets combined with strong Cooper oil production.Sales volumes increased 4%,with higher equity p

22、roduction offsetting lower third-party gas sales.SALES REVENUE$3,220 million 200820092,7622,181201020112,2282,72120123,220santos Annual Report 20123Net profit After tAX$519 million31%operAtiNG CAsh flow$1,658 million32%uNDerlyiNG Net profit After tAX$606 million34%EARNINGS&DIVIDENDSPER SHARE 54.4 ce

23、nts20082009251201020112012524242603785305430Earnings per shareDividends declared per shareNET PROFIT AFTER TAX$519 million200820091,650434201020115007532012519OPERATING CASH FLOW$1,658 million200820091,3851,155201020111,2731,25320121,658UNDERLYING NET PROFIT AFTER TAX$606 million20082009548257201020

24、113764532012606SAFETY PERFORMANCE5.020082009total recordable case frequency rate(per million hours worked)5.83.6201020113.33.320125.0Sales revenue increased by 18%,driven by a 33%increase in crude oil production and higher gas prices.The total 2012 dividend of 30 cents per share is in line with the

25、prior year.Net profit after tax was 31%lower,as the prior year included$408 million from the sale of interests in GLNG and Evans Shoal.Operating cash flow increased 32%,due to higher sales receipts and lower taxes paid,partially offset by higher operating costs.Underlying net profit increased by 34%

26、,with higher liquids volumes and gas prices partially offset by higher production costs.The rate of low severity injuries increased in 2012,reflecting a record 19 million work hours,however the overall injury severity decreased.4Santos delivered stronger production,record sales revenue and higher un

27、derlying earnings in 2012.Major projects are on track to deliver long-term returns to shareholders.4Left to right:Peter Coates and David KnoxSantos Annual Report 20125Review byPeter Coates and David KnoxChairman and Chief Executive OfficerDear Shareholder,Santos delivered growth in production and un

28、derlying earnings in 2012.Production was up 10%to 52 million barrels of oil equivalent(mmboe)and sales revenue was a record$3.2 billion,driven by a 33%increase in crude oil production.Underlying earnings rose by 34%to$606 million,primarily due to higher oil and gas production and higher prices.Our b

29、alance sheet is robust,and the base business continues to generate strong cash flows to fund our pipeline of sanctioned growth projects and to provide shareholder returns.In addition to the base business,delivering our LNG portfolio is critical to achieve our vision of being a leading oil and gas ex

30、ploration and production company in Australia and Asia.Our major LNG projects are making good progress.PNG LNG is over 75%complete and on track for first LNG in 2014.GLNG is 47%complete,with first LNG expected in 2015.You can read more about these projects later in this Annual Report.By 2015,Santos

31、will have equity production from three LNG projects supplying Asian markets,which are underpinned by long-term,oil-linked,binding offtake agreements.This will be an extraordinary achievement for a company of our size,and these assets will deliver a significant step-change to our production and cash

32、flow.Our strategy is to unlock the companys significant resources in a growing market for oil and gas in Australia and Asia.We will do this safely,sustainably and profitably to deliver long-term growth in shareholder value.We are targeting 6%compound annual production growth to the end of the decade

33、,which would deliver annual production of between 80 and 90 mmboe by 2020.AustrAliAs eNerGy trANsformAtioNAs one of the largest producers of natural gas in Australia,Santos will continue to play its part in providing energy to fuel both our domestic and export markets.Energy is critical to the devel

34、opment of economies,and Australia is no different.Not only is energy essential for providing power to our homes and businesses,but the development of a countrys energy resources creates jobs,fosters innovation and delivers wealth and prosperity.Because of the importance of energy,the development of

35、our energy resources and the policies in place to govern that development command the attention of our governments,communities and industry.This situation is heightened when things change,and Australias energy sector is going through a period of rapid transformation which,if well managed,can deliver

36、 great outcomes.Natural gas is key to understanding Australias energy transformation.In terms of our gas resources,Australia is truly blessed,with current estimates of more than 50 years of gas in the ground available for both domestic and export markets.And this is without taking into account Austr

37、alias shale gas potential.Santos has a large Australian unconventional gas resource,and has a focused strategy to evaluate and commercialise this gas.During 2012,Santos produced Australias first commercial gas from a shale well in the Cooper Basin,enabling us to book Australias first 2P shale gas re

38、serves.stroNG positioN to fuND Growth,with A foCus oN Cost CoNtrolIn 2013,we have another busy year ahead of us,both for project delivery and with our exploration drilling program.The Fletcher Finucane oil project in the Carnarvon Basin,sanctioned in January 2012,is on schedule to deliver first oil

39、in mid-2013.Work will also continue at the Dua oil project in Vietnam,with first oil on schedule for the first half of 2014.Following the exploration success at Crown,offshore Western Australia,the Browse exploration campaign continues in 2013 with drilling of two exciting prospects.In the Cooper Ba

40、sin,we continue to explore the potential of shale and other unconventional gas.We are in a strong position to fund our growth,with$5.8 billion of cash and available credit facilities as at 31 December 2012.We also have strong operating cash flow,with average cash flow over the past five years of ove

41、r$1.3 billion per year.This is driven by production growth,an increasing proportion of oil in our project mix,as well as rising gas prices in key markets.In order to deliver our portfolio for the future,we also need to be leaner and more efficient.Santos is committed to a relentless focus on product

42、ivity and cost control across our portfolio.We are investing in technology to drive costs out of the business,such as a more efficient drilling rig fleet to drill from multi-well pads and initiatives to reduce plant downtime in the Cooper Basin.6Review byPeter Coates and David Knox(continued)sAfety

43、AND sustAiNABilityAt Santos,safety permeates everything we do.Good safety performance,covering both our people and our operating facilities,is critical to our business success.During 2012,Santos lost-time injuries were at a five-year low.There was an increase in the rate of low-severity injuries,ref

44、lecting the record level of manual work being conducted on a day-to-day basis.This trend will be addressed as part of Santos relentless focus on eliminating serious incidents and injuries from its business.Sustainability is an integral part of Santos.This means focusing on the health and wellbeing o

45、f our people,responsibly managing our environmental impact,working in partnership with the communities in which we operate,and reliably managing our business.Our 2012 Sustainability Report is designed to complement this Annual Report,and is available online at encourage you to read our Sustainabilit

46、y Report and find out more about what sustainability means to Santos and what we are doing to achieve it.DiviDeND mAiNtAiNeD The Board maintained the dividend at 30 cents per share fully franked in 2012 and anticipates that the dividend will remain at this level during our capital intensive growth p

47、hase between now and PNG LNG start-up.Following that,the Board will look to increase the dividend as soon as appropriate.Santos continues to offer a dividend reinvestment plan(DRP)which enables shareholders to increase their shareholding at a 2.5%discount to the market price and without brokerage.em

48、ployees AND the BoArDOn behalf of the Directors,we would like to thank all Santos employees for their hard work and dedication to delivering value to our shareholders.We would also like to thank our employees who have rallied to support their local communities,be it during the floods in Queensland a

49、t the beginning of 2012 and again in 2013,or through volunteering during the year.Mr Hock Goh joined the Board in October 2012,and through his extensive experience in the oil and gas industry in Asia is contributing strongly to your company.We would like to express our appreciation to all of our fel

50、low Directors for the commitment and dedication they bring to the Santos Board.peter CoAtes AoChairmanDAviD KNoXChief Executive Officer and Managing Director7santos Annual Report 2012Our vision and strategyOur vision is to be a leading oil and gas exploration and production company in Australia and

51、Asia.We have a three-pronged strategy to achieve this.Delivering the strategy in 2012 Highest-ever Carnarvon gas production,driven by new projects online Highest Cooper oil production since 2009 Fletcher Finucane project 85%complete with first oil expected in mid-2013 Australias first commercial pro

52、duction of gas from a shale well in the Cooper Basin Exploration success at Crown in the Browse Basin Strong production from Darwin LNG post planned shutdown PNG LNG project over 75%complete and on track for first LNG in 2014 GLNG project 47%complete and on track for first LNG in 2015 Proposed float

53、ing Bonaparte LNG project in concept design phase Wortel gas project in Indonesia delivered on budget Strong oil production from Chim So,Vietnam Dua oil project sanctioned and over 35%complete,with first oil expected in the first half of 2014Australia Growing our strong domestic base business LNG De

54、livering our transformational LNG portfolioAsia Building a focused exploration-led portfolioSales gas,ethane and LNG 38.3Crude oil 9.5Condensate 2.7LPG 1.6Sales gas,ethane and LNG 44.1Crude oil 12.3Condensate 3.0LPG 1.6Sales gas,ethane and LNG 1,319Crude oil 1,401Condensate 321LPG 1798Santos 2012 pr

55、oduction was 10%higher than in 2011,driven by new producing assets and strong performance from the base business.Total crude oil production of 7.2 mmboe was up 33%on the previous year,reflecting a full year of oil production from Chim So,Vietnam,and a successful drilling campaign over the past 12 mo

56、nths in the Cooper Basin.Total sales gas,ethane and LNG production of 38.3 mmboe was up 8%,driven by the highest-ever production from the Carnarvon Basin due to strong production from the Spar and Reindeer fields.Condensate and LPG production was in line with the previous year.In 2013,Santos is fore

57、casting production of between 53 and 57 mmboe,with the increase driven by forecast strong production from the base business and the start-up of the Fletcher Finucane oil project in Western Australia in mid-2013.Sales volumes of 61.0 mmboe were up 4%,with crude oil sales increasing by 43%due to highe

58、r equity production and higher third-party Cooper oil purchases.Gas sales declined slightly with lower sales from Indonesia,Cooper Basin and Victorian assets partially offset by higher sales from Reindeer and John Brookes in Western Australia.Santos continued to grow its third-party sales business d

59、uring the year,primarily in Eastern Australia.In 2012,Santos sold a record 9.9 mmboe of third-party gas,oil,condensate and LPG,generating a before-tax profit of$60 million.Sources of third-party gas include Cooper Basin gas produced by others,gas produced from the Longtom field and processed at Sant

60、os Patricia-Baleen plant,and the non-Santos share of gas produced in the GLNG acreage which is sold domestically.Sales revenue of$3,220 million in 2012 was a record high for Santos,and was up 18%on the previous year.Sales revenue from oil was up more than 40%,driven by strong growth in the companys

61、oil production and favourable oil prices during the year.Santos also recorded higher sales revenue for natural gas and ethane,condensate and LPG in 2012.LNG sales revenue was slightly lower primarily due to the planned shutdown of the Darwin LNG plant during 2012.The average gas price increased from

62、$4.71/GJ to$5.14/GJ,driven by higher priced gas sales from Reindeer and Wortel,along with the favourable Maleo price review.Crude oil prices were in line with 2011,with the average realised price in 2012 of US$117.83.proDuCtioN52.1 mmboesAles reveNue$3,220 millionsAles61.0 mmboeSantos Annual Report

63、20129Production and sales 2012 2011 Field unitsmmboeField unitsmmboeSales gas,ethane and LNG(PJ)Cooper 66.6 11.5 66.1 11.4 Carnarvon65.0 11.2 45.5 7.8 Indonesia28.1 4.8 33.9 5.8 Otway19.4 3.3 19.0 3.3 Darwin LNG/Bayu-Undan14.4 2.5 14.7 2.6 Surat/Bowen11.2 1.9 14.2 2.4 GLNG10.8 1.9 9.0 1.6 Bangladesh

64、4.9 0.8 3.5 0.6 Vietnam2.1 0.4 -Amadeus-0.7 0.1 Gunnedah-0.2 -Total production 222.5 38.3 206.8 35.6 Total sales 256.7 44.1 265.8 45.7 Condensate(000 bbls)Darwin LNG/Bayu-Undan 1,174.1 1.1 1,291.9 1.2 Cooper 1,030.7 1.0 1,072.0 1.0 Carnarvon 635.6 0.6 502.4 0.5 Amadeus 29.9 -24.1 -Otway 19.7 -19.5 -

65、Indonesia 5.6 -5.2 -Surat/Bowen 1.8 -2.8 -Bangladesh-0.6 -Total production 2,897.4 2.7 2,918.5 2.7 Total sales 3,180.5 3.0 2,919.6 2.7 2012 2011 Field unitsmmboeField unitsmmboeCrude oil(000 bbls)Cooper 3,226.1 3.2 2,831.4 2.8 Vietnam 2,870.2 2.9 680.6 0.7 Stag 1,411.6 1.4 1,677.2 1.7 Mutineer-Exete

66、r 604.0 0.6 669.5 0.7 Barrow 566.6 0.5 526.0 0.5 Indonesia 340.2 0.3 269.9 0.3 Amadeus 198.0 0.2 112.7 0.1 Thevenard 180.6 0.2 235.5 0.2 PNG 73.8 0.1 77.5 0.1 Surat/Denison 66.8 0.1 89.6 0.1 Total production 9,537.9 9.5 7,169.9 7.2 Total sales 12,309.5 12.3 8,615.6 8.6 LPG(000 tonnes)Cooper 125.1 1.

67、0 134.4 1.1 Darwin LNG/Bayu-Undan 69.4 0.6 75.2 0.6 Total production 194.5 1.6 209.6 1.7 Total sales 191.7 1.6 198.4 1.7 Sales revenue($million)20122011Crude oil 1,401 994Sales gas,ethane and LNG 1,319 1,252Condensate 321 304LPG 179 171Total sales revenue3,2202,721Santos continues to increase produc

68、tion year-on-year from our base business.10Reserves and resourcesSantos growing reserve position,combined with existing infrastructure,leaves the company strategically well placed to supply the growing demand for natural gas in Australia and Asia.In 2012,Santos continued its consistent track record

69、of reserves growth.Proved and probable(2P)reserves have increased in nine of the past ten years,while producing over 480 mmboe in the same period.Proved and probable hydrocarbon reserves increased to 1,406 mmboe as at the end of 2012.Based on the 2012 production of 52 mmboe,Santos has a current 2P r

70、eserves life of 27 years.Approximately 88%of Santos 2P reserves are sales gas,6%crude oil,4%condensate and 2%LPG.On a proved(1P)reserves basis,year-end reserves were 663 mmboe,14 mmboe higher than 2011.2P additions of 71 mmboe in 2012 were driven by strong growth in Cooper Basin gas reserves,due to

71、successful ongoing results from the infill drilling program combined with technical studies.Reserves growth was also recorded in Cooper Basin oil,Queensland CSG,the Carnarvon Basin and Vietnam,more than offsetting a reduction in Bonaparte reserves.Santos also booked Australias first 2P shale gas res

72、erves,due to the success of the Moomba-191 shale gas well that was commissioned in September 2012.Net 2P acquisitions of 23 mmboe reflect Santos purchase of additional interests in the Combabula CSG field in Queensland,consolidation of interests in Fletcher Finucane,and the purchase of Woodsides int

73、erest in Mutineer-Exeter.Santos has a strong track record of reserves replacement which is an important target to drive long-term shareholder value growth.A reserves replacement ratio(RRR)of more than 100%indicates that reserves grew by more than production during the period.In 2012,Santos 2P RRR wa

74、s 180%,as reserves additions and net acquisitions and divestments of 94 mmboe exceeded production of 52 mmboe.Over the five years to 2012,Santos 2P RRR was a strong 305%.This was primarily driven by the sanction of the PNG LNG project,growth in CSG reserves in Queensland and NSW,Cooper gas and the C

75、arnarvon.2P RESERVES1,406 mmboe 200820091,0131,440201020111,4451,36420121,4062P RESERVES RECONCILIATIONmmboe Reservesyear-end2011Additions1,36471Acquisitions/divestmentsProduction23(52)Reservesyear-end20121,4062P RESERVES REPLACEMENTRATIO%1-year RRR1805-year RRR305Santos Annual Report 201211reserves

76、(sANtos shAre)mmboeYear-end 2011ProductionAdditionsAcquisitions/divestmentsYear-end 20121P reserves 649-52 65 1 663 2P reserves 1,364-52 71 23 1,406 2C contingent resources 2,162-108-89 1,965proveN plus proBABle reserves(sANtos shAre)By ACtivitySales gas PJCrude oil mmbblCondensate mmbblLPG 000 tonn

77、esTotal mmboeReserves year-end 2011 6,959 71 72 3,449 1,364 Production-222-10-3-194-52 Additions 294 20-116 71 Acquisitions/divestments 130 1-23 Estimated reserves year-end 2012 7,161 82 69 3,371 1,406proveN plus proBABle reserves(sANtos shAre)yeAr-eND 2012 By AreASales gas PJCrude oil mmbblCondensa

78、te mmbblLPG 000 tonnesTotal mmboeEastern Australia Cooper Basin 1,213 30 21 2,522 280 Southern Australia 367-5 398 71 Queensland CSG 1,920-330 Queensland conventional 41-7 New South Wales CSG 1,141-196 Total Eastern Australia 4,682 30 26 2,920 884 Western Australia and Northern Territory Carnarvon 8

79、31 26 9-177 Bonaparte 179 -7 451 41 Amadeus 123 8 2-31 Total Western Australia and Northern Territory 1,133 34 18 451 249 Asia Pacific Papua New Guinea 1,228-25-235 Indonesia 93 1-17 Vietnam and Bangladesh 25 17-21 Total Asia Pacific 1,346 1825-273 Total 7,161 82 69 3,371 1,406Unless otherwise state

80、d,all references to reserves and resource quantities in this release are Santos net share.References to contingent resources are mid(2C)contingent resource estimates.Sales gas reserves and contingent resources are estimated after deducting the fuel,flare and vent necessary to produce and deliver sal

81、es gas.LNG project sales gas reserves are estimated after deducting the fuel,flare and vent necessary to produce and deliver sales gas to the LNG plant.The information in this reserves statement has been compiled by Greg Horton,a full-time employee of the company.Greg Horton is qualified in accordan

82、ce with ASX Listing Rule 5.11 and has consented to the form and context in which this statement appears.Santos prepares its reserves and contingent resources estimates in accordance with the definitions and guidelines set forth in the 2007 Petroleum Resources Management System(PRMS)prepared by the S

83、ociety of Petroleum Engineers(SPE).Santos engages independent experts Gaffney,Cline&Associates,Netherland,Sewell&Associates,Inc.and DeGolyer and MacNaughton to audit and/or evaluate reserves and contingent resources.Each auditor found,based on the outcomes of its respective audit and evaluation,and

84、its understanding of the estimation processes employed by Santos,that Santos 31 December 2012 reserves and contingent resources quantities in aggregate compare reasonably to those estimates prepared by each auditor.Thus,in the aggregate,the total volumes summarised in the Santos summary table repres

85、ent a reasonable estimate of Santos reserves and contingent resources position as at 31 December 2012.12Review by Chief Financial OfficerAndrew SeatonSantos produced strong operational and financial results in 2012,which is testament to our focus on delivery across all parts of the business.Sales re

86、venue was up 18%to a record$3.2 billion,driven by higher crude oil sales volumes and higher gas prices.Gas prices were up 9%on the previous year,reflecting higher prices from our Indonesian and Western Australian assets.Net profit after tax(NPAT)was$519 million for the year.The previous year compara

87、ble profit of$753 million included gains on asset sales of$408 million after tax.The 2012 result includes$77 million of after tax impairments.The impairments primarily relate to the Sangu assets in Bangladesh and revisions to abandonment cost estimates for the non-operated Thevenard Island asset,loc

88、ated offshore Western Australia.Underlying net profit after tax was up 34%to$606 million,continuing the growth trend since 2009.Growth in underlying profit was driven by higher liquids volumes and gas prices,partially offset by higher costs.Production costs of$660 million were$104 million higher tha

89、n the previous year,with over half of this increase due to the commencement of production from new assets,such as Chim So,Reindeer and Wortel.Other main drivers of the cost increase were the planned shutdown of Bayu-Undan/Darwin LNG and higher maintenance activities.Managing costs remains an absolut

90、e priority for Santos,and we are targeting 2013 production costs of between$630 and$660 million.Operating cash flow of$1,658 million was 32%higher than the previous year due to the favourable impact of higher sales volumes and lower taxes paid,partially offset by higher operating costs.This is a 32%

91、increase on 2011,and underpins our robust funding position in support of our major growth capital expenditure program.The companys capital expenditure increased to$3.4 billion in 2012 as our investment in growth projects continued.Capital expenditure is forecast to peak in 2013 at approximately$4 bi

92、llion,including approximately$2.5 billion on the PNG LNG and GLNG projects,ahead of their start-up in 2014 and 2015 respectively.Santos delivered strong financial results in 2012,with record sales revenue and underlying profit up 34%to$606 million.Santos Annual Report 201213Key Drivers of 2012 NpAt

93、versus 2011The main drivers of the NPAT decrease from$753 million to$519 million are represented in the above chart,and are as follows:Prices and foreign exchange increased NPAT by$22 million,primarily due to higher gas prices.Sales volumes increased NPAT by$89 million,as we sold higher volumes of c

94、rude oil from Vietnam and the Cooper Basin.Production costs decreased NPAT by$32 million,as costs trended higher due to cost inflation of approximately 5%across the business,together with planned shutdown and maintenance activity.Depreciation and depletion expenses decreased NPAT by$22 million,refle

95、cting higher unit development costs.A lower effective tax rate increased NPAT by$71 million,primarily due to a reduction of foreign losses not recognised.Other items increased NPAT by$13 million,primarily due to lower exploration and evaluation expenditure.Gains on asset sales decreased NPAT by$400

96、million,due to the sale of interests in Evans Shoal and GLNG completed in 2011.Lower impairment losses in 2012 increased NPAT by$25 million.stroNG fiNANCiAl positioNSantos funding and liquidity position remains very robust.At the end of December 2012,Santos had$5.8 billion of funding capacity,includ

97、ing$2.2 billion cash and$3.6 billion undrawn committed corporate and project debt facilities.Maturities on drawn debt facilities are minimal out to 2017,at which time Santos has the option to redeem the 1 billion hybrid notes that otherwise mature in 2070.This strong liquidity position provides the

98、capacity to fund the execution of the companys sanctioned development projects while minimising refinancing risk.AVAILABLE FUNDING CAPACITY$billion CashUndrawncorporatefacilities2.22.1Undrawnproject facility(PNG LNG)UndrawnECAfacilities0.51.0NET PROFIT AFTER TAX$million 2011Prices andforeignexchange

99、75322VolumeProductioncosts89(32)Depreciationanddepletion(22)Taxes71Other13Gain onasset sale(400)Impairment25201251914roBust frAmeworKSantos has developed a company-specific sustainability framework that is based around the assessment of sustainability performance across four interrelated domains:env

100、ironment,community,our people and economic.The framework aims to provide a comprehensive and consistent set of tools to assess sustainability performance,integrate sustainability into the way we operate and drive improvement across the business.pArtNeriNG with CommuNitiesSantos understands the impor

101、tance of supporting local communities in meaningful ways,and seeks to engage and inform communities by providing transparent,accurate and up-to-date information.As part of all community engagement strategies for major projects,we provide regular and timely project updates,targeted briefings,site tou

102、rs,free-call telephone numbers,regional offices and information sessions.During 2012,the Santos GLNG Community Handbook was developed based on the outcomes of a series of community information sessions and consultative committees.The handbook is designed to help locals recognise the possible social

103、impacts of the GLNG project and addresses six themes water and environment,community safety,social infrastructure,community wellbeing and liveability,local industry participation and training,and Aboriginal engagement and participation.liGhteNiNG our footpriNtWe have integrated systems in place to m

104、anage our activities responsibly and to find new ways to reduce our environmental footprint.Santos seeks to continually improve the way it manages the treatment and disposal of formation water,and looks for innovative ways to limit impacts and achieve beneficial outcomes for the community and enviro

105、nment.For example,Santos water management solutions aim to benefit local communities and augment existing water supplies through recharging groundwater and surface water.In 2012,over two million litres of water were recycled and diverted to local pasture irrigation.At Fairview,Santos has also introd

106、uced an innovative system to close the loop on drilling fluids,which is helping to minimise the disposal of waste water and reduce the consumption of water requirements.Approximately 500,000 barrels of drilling fluid were processed in 2012,with around 90%being reused throughout operations.looKiNG Af

107、ter our peopleSantos is committed to creating a safe,supportive and productive work environment that encourages diversity,fosters resilience and maximises potential and performance.The Santos employee survey was conducted again in 2012.The survey covered a variety of themes including job satisfactio

108、n,corporate values,leadership,support,feedback and recognition,integrity,fairness and culture.Results for 2012 were pleasing,with a significant increase in favourable responses.Santos is committed to providing an inclusive workplace that embraces people with a diversity of skills and backgrounds.In

109、2012,34%of our new recruits are female(compared to 27%of the total workforce),revealing a trend towards greater female participation.Santos encourages Aboriginal workforce participation through supporting cadetship,traineeship,apprenticeship and scholarship opportunities.To date,137 Aboriginal emplo

110、yment,training and education opportunities have been created within Santos and our contractor companies,as well as 135 opportunities within the GLNG project.sustAiNABility report 2012For further information,please refer to our Sustainability Report,which provides further details on Santos management

111、 approach and performance.Delivering sustainablyIntegrating environmental,social and governance considerations into the way we do Annual Report 20122012 key statisticsSupporting the Clontarf Foundation,Gibb River charity bike ride.Water bore testing,Gunnedah Basin.Supporting the Royal Flying Doctor

112、Service,outback Australia.We achieved our 2012 emissions intensity target of 70kt CO2e/mmboe.Santos is committed to providing an inclusive workplace that embraces diversity and supports women in technical and management roles.While injury rates have increased,our systems are successfully preventing

113、severe injuries.1520092010201120121.75.07.02008SAFETY PERFORMANCE Total recordable case frequency rate(per million hours worked)EmployeeContractorCombinedWORKFORCE GENDER PROFILE%8911772384168713762469317327Board of DirectorsStrategic leaderFunctional leaderTeam leaderTechnical specialistTeam member

114、 Total MaleFemaleGREENHOUSE GAS EMISSIONSFROM SANTOS OPERATED ASSETS 3.8 million tonnes CO2e(Scope-1)20082008-094.23.52009102010113.73.62011123.8AustraliaOther162012 delivery2012 key statistics16Australias first commercial production of gas from a shale well.Highest Cooper oil production since 2009.

115、First multi-well pad drilling project executed in Cooper Basin.Farm-in to 19 million acres across the Amadeus and Pedirka Basins.Drilling at the Tindilpie multi-well pad,Cooper Basin.Turning the valve at Moomba-191 shale well,Cooper Basin.1,000th cargo at Port Bonython,South Australia.Production was

116、 in line with 2011,with higher Cooper Basin oil production offset by lower Queensland gas production.EBITDAX increased by 5%,with higher crude oil sales driving higher sales revenue partially offset by higher third-party purchase costs.3333PRODUCTION 22.3 mmboe 2010201122.322.4201222.3EBITDAX(exclud

117、ing asset sales)$666 million 201020115776332012666Santos Annual Report 201217Santos is a leading producer of natural gas,gas liquids and crude oil in eastern Australia.Gas is sold primarily to domestic retailers and industry,while gas liquids and crude oil are sold in the domestic and export markets

118、.The demand for natural gas in eastern Australia is expected to triple by 2016 which is driving gas prices significantly higher.Santos has substantial gas reserves and resources,conventional and unconventional,and is well positioned to supply the growing eastern Australian gas market.Our aim is to d

119、ouble current production by 2020 whilst delivering lower production costs per barrel through maximising utilisation of existing infrastructure.Cooper GAs trANsitioN uNDerwAyGas production of 66.6 petajoules during 2012 was 1%higher than 2011,with improvements in field and plant downtime partially of

120、fset by lower upstream capacity due to the project backlog caused by the wet weather that affected the 20102011 drilling campaigns.During the year,23 gas development wells were drilled,including the Tindilpie six-well pad that will produce 15 mmscf/day.Multi-well pad technology is used extensively i

121、n the United States for its greater efficiency,lower costs and a smaller environmental footprint.A 16-well pad is planned for the Cowralli field for 2013,with an expected reduction in each well cost of 16%.During the year,Santos also developed plans for a phased expansion of the Moomba processing pl

122、ant,with phase one gross investment of up to$800 million over the next four years.This will be the most significant project in three decades affecting the Moomba plant and field satellites,and will include an additional carbon dioxide processing train and associated facilities,upgrades to existing s

123、atellite compression stations,and installation of gathering systems and trunklines covering hundreds of kilometres.DeliveriNG Cooper oil Santos produced 3.2 million barrels of oil from the Cooper Basin in 2012,its highest production since 2009.Driving the increase was the 2011 drilling campaigns in

124、the Zeus and Cook fields,improved access to field infrastructure following the 20102011 floods,and strong performance from the Charo wells brought on line in the third quarter of 2012.In addition,Santos generated additional revenue through the ongoing processing of third-party crude oil at Moomba.Th

125、is is expected to grow by 30%in 2013 as additional third-party volumes are processed.moomBA-191 suCCessSantos achieved a significant milestone in the second half of 2012 with the commencement of Australias first commercial production of gas from a shale well.The Moomba-191 well was commissioned in l

126、ate September 2012 with an initial flow rate greater than 3 mmscf/day,exceeding expectations.As it was only 350 metres away from existing pipelines and only eight kilometres from Moomba,the well was able to be connected to the market within weeks.As at the end of the year,the well was flowing at 2.4

127、 mmscf/day,a pleasing result.Following this success,Santos will expand its unconventional gas exploration campaign in 2013,with four exploration wells targeting Moomba shale and the Nappamerri Trough basin centred gas plays.Nsw GAs opportuNitySantos has the largest natural gas acreage position in Ne

128、w South Wales,with uncontracted reserves close to existing market channels.Santos plans to commence a three-year drilling and seismic program in the Gunnedah Basin in 2013,including pilot and corehole wells to gather production data,working over existing wells and constructing state-of-the-art water

129、 treatment facilities.fArm-iN to AmADeus AND peDirKA BAsiNsIn October,Santos announced a farm-in with Central Petroleum Ltd to earn a 70%interest in 13 permits in the Amadeus and Pedirka Basins,onshore Northern Territory.Under the agreement,Santos will be the operator of all the permits.A 2D seismic

130、 survey and an exploration well are planned,targeting a potentially large conventional and unconventional gas resource.The proposed program is a natural extension to Santos existing operations in the Mereenie field in the Amadeus Basin,which are managed by the Eastern Australia business and produce

131、oil,condensate and gas.Eastern AustraliaPositioned for growth,with innovation and investment helping us meet rising demand locally and abroad.18The WA&NT business has gone from strength to strength,posting record gas production from the Carnarvon Basin and contributing over a third of Santos 2012 pr

132、oduction and revenue.Santos strategy is to build on this success through further domestic gas sales,increased oil production and progress towards the commercialisation of its northern Australian assets.stroNG DomestiC GAs proDuCtioNSantos Western Australia domestic gas production was up over 40%in 2

133、012,driven by the Reindeer and Spar fields brought on line in 2011.With partner Apache Energy,Santos processes gas through the Varanus Island and Devil Creek facilities in the Carnarvon Basin,and supplies it to mining and industrial customers.Options to grow this domestic gas business include new sa

134、les for Reindeer gas,additional processing capacity at Devil Creek and follow-on projects in the Spar and John Brookes gas fields.CArNArvoN oil DevelopmeNt oNGoiNGSanctioned in January 2012,the Fletcher Finucane oil project is currently 85%complete and on track for first oil in mid-2013.All three de

135、velopment wells have been drilled and completed.Offshore installation of the sub-sea facilities,including the tie-in of the three wells into the Mutineer-Exeter facilities,will commence in early 2013.In December,Santos acquired Woodsides 8.2%interest in Mutineer-Exeter,which will result in aligned j

136、oint-venture parties having interests in both Mutineer-Exeter and Fletcher Finucane.Santos has also identified a number of follow-on oil opportunities in the Mutineer-Exeter area,which will be explored over the next few years.CrowN GAs DisCoveryIn November,Santos made a significant gas discovery at

137、the Crown exploration well in WA-274-P,located between the Poseidon and Ichthys fields in the offshore Browse Basin.The well was drilled to a total depth of 5,301 metres and intersected 61 metres of net gas pay in the Jurassic-aged Montara,Plover and Malita reservoirs.Pressure data was acquired at m

138、ultiple points indicating that gas would be expected to flow at a high rate and multiple condensate-bearing gas samples were recovered to surface.The preliminary recoverable contingent resource estimate for the discovery is up to 5 TCF.The Crown discovery is located close to existing and proposed LN

139、G projects in the Browse Basin,with discussions underway with joint-venture partners for follow-up drilling.eXCitiNG 2013 DrilliNG proGrAmAn exciting exploration program is planned for the Browse Basin in 2013,following the success of Crown in 2012.Drilling of the Dufresne and Bassett-West prospects

140、 is planned for the first half,targeting gas and associated liquids in the neighbouring permit WA-408-P.In the Carnarvon Basin,drilling of the Winchester exploration well is planned for 2013,and gas with high gas liquids content is anticipated.The Zola appraisal well is also planned to be drilled,a

141、follow-up from the 2011 discovery of 100 metres of net gas pay in an excellent quality reservoir.Multiple development options exist,including domestic gas opportunities and tie-back to third-party LNG projects.offshore NortherN AustrAliA proGressIn June,Santos and partner ConocoPhillips signed an ag

142、reement with South Koreas SK E&S to progress the appraisal of the Caldita Barossa gas fields.Under the agreement,SK E&S will fund up to US$520 million in joint venture carry obligations and contingent payments,with planning for a three-well appraisal program currently underway.Various development op

143、tions for the fields will be assessed,including floating LNG and a tie-back to the Darwin LNG plant.In October,the Bonaparte LNG project cleared a major regulatory milestone,receiving environmental approval from the Australian Government.GDF SUEZ Bonaparte,the operator and Santos partner in the proj

144、ect,has awarded contracts to KBR and Technip to complete independent designs of the floating LNG facility during the concept definition stage of development.NortherN territory shAle fArm-iNOnshore,Santos is expanding its footprint in the Northern Territory,with a farm-in to four prospective shale ga

145、s and oil permits in the McArthur Basin announced in December.The permits offer gas and liquids potential close to existing infrastructure,including gas pipelines,a railway and a major highway.These assets add to Santos NT portfolio led by Darwin LNG,which continued to perform strongly following a p

146、lanned shutdown in the first half of 2012.Western Australia and Northern TerritoryProven record of delivery with strong growth opportunities.Santos Annual Report 20122012 delivery2012 key statisticsHighest-ever Carnarvon gas production,up 43%from 2011.Exploration success at Crown in Browse Basin.SK

147、E&S farm-in to Caldita Barossa for up to US$520 million.Fletcher Finucane project 85%complete and on schedule for first oil in mid-2013.Installation works at Fletcher Finucane oil project,Carnarvon Basin.Supplying domestic gas from the Devil Creek gas processing plant,Pilbara.On board the Mutineer-E

148、xeter FPSO,Carnarvon Basin.Production was up 18%,driven by a full year of production from the Reindeer and Spar fields in the Carnarvon Basin.EBITDAX was in line with 2011,with strong revenue from higher priced Reindeer gas sales offset by higher production costs,including the cost of the Darwin LNG

149、 planned shutdown.193333PRODUCTION 18.7 mmboe 2010201116.315.8201218.7EBITDAX(excluding asset sales)$792 million 201020116417912012792202012 delivery20GLNG project 47%complete and on track for first LNG in 2015.Over 15 million hours worked across the project.5,200 people working on the project at ye

150、ar end.Upstream hub compressor station construction commenced.All pipeline landed in Queensland and pipeline construction underway.Strong progress on construction of LNG trains and supporting infrastructure on Curtis Island.Start of module construction in Batangas,the Philippines.Brisbane operations

151、 centre commissioned.LNG plant construction underway at Curtis Island.Work at the Roma hub compressor station.Installation of the LNG tank roof plates,Curtis Island.33333333Santos Annual Report 201221oN trACK for first lNG iN 2015The GLNG project involves the development of gas fields in the Bowen a

152、nd Surat Basins,the construction of a 420-kilometre underground gas transmission pipeline and a two-train LNG processing facility on Curtis Island in Gladstone.The project is a joint venture between Santos and three of the worlds largest LNG companies,PETRONAS,Total and KOGAS.Sanctioned in January 2

153、011,the project is now 47%complete and on track for first LNG in 2015.BuilDiNG vAlue for shAreholDersThe GLNG project is at the heart of Santos vision to be a leading Asia Pacific exploration and production company.With the sanction of the GLNG project,Santos opened a channel to strong Asian demand

154、for Australian LNG,reinvigorating our Eastern Australia business through access to the stronger priced Asian market.The scale afforded by that higher demand allows Santos to underpin the investment needed to unlock the next wave of Eastern Australia development,including Cooper Basin shale and Moomb

155、a infrastructure.The GLNG project had already provided material value before the final investment decision was made in January 2011,with the 70%sell-down to PETRONAS,Total and KOGAS generating$3.3 billion in cash proceeds.Underpinned by binding 20-year sales contracts with KOGAS and PETRONAS,GLNG is

156、 a new legacy asset that will generate substantial cash flow to fund the next wave of Santos growth after 2015.GAs supply BuilD CoNtiNuesTo execute the most efficient gas supply for the project,gas will be sourced from the dedicated CSG fields,underground storage,supply from Santos portfolio and thi

157、rd parties.In 2012,143 wells were drilled in the projects CSG acreage,with the gas produced supplied to domestic contracts and the remainder injected into underground storage.A further 200 to 300 wells are planned to be drilled each year from 2013 to 2015.Additional gas supply agreements for a total

158、 of 595 PJ were signed with third parties in 2012 for gas supply to the GLNG project,adding to the 750 petajoules that Santos has agreed to supply,primarily from the Cooper Basin.GAsfielD AND pipeliNe CoNstruCtioN uNDerwAyMore than 5,200 people are currently working on the GLNG project,with a signif

159、icant number in the upstream and pipeline construction.Construction is currently underway at the three hub compressor stations in Fairview and Roma,with site foundations well advanced and equipment installation commenced.Materials and equipment for key infrastructure continue to arrive from local an

160、d overseas suppliers.All 420 kilometres of the gas transmission pipeline have been delivered to site,marking a significant milestone for the project.Construction continues with over 140 kilometres of the mainland pipeline right-of-way cleared and graded,and pipeline welding well underway.In December

161、,pipeline burial in the Arcadia Valley commenced the final step before rehabilitation works are carried out.lNG plANt AND port CoNstruCtioN On Curtis Island,construction of the two LNG trains and supporting infrastructure continues to progress.Bulk earthworks have been completed,and the first mechan

162、ical equipment has been installed on Train 1.Good progress has been made on the LNG tanks,with installation of roof plates and concrete wall construction ongoing.Work is also underway at the module yard in the Philippines to construct and assemble the 110 modules required,with modules planned to be

163、shipped to site in 2013.CApitAl Cost estimAte iNCreAseD to us$18.5 BillioNIn June 2012,Santos announced that the gross capital cost estimate for the GLNG project would be increased from US$16 billion to US$18.5 billion for the period from final investment decision(FID)until the end of 2015.This is b

164、ased on foreign exchange rates that are consistent with the assumptions used at FID(A$/US$0.87 average over 2011 to 2015).The increase primarily relates to additional upstream development in the Fairview and Roma fields,such as additional compressors,wells,gathering production facilities,water handl

165、ing facilities and other infrastructure.GLNGConstruction well underway on a cornerstone project.22Santos strategy in Asia is to be a leading independent upstream oil and gas producer,by deepening our portfolio of assets in our core countries of Indonesia,Vietnam and Papua New Guinea.Asias energy tre

166、nds are matching its economic trends,as millions of people across the region seek a better way of life,largely through migration to urban centres and greater access to heat,light and mobility.Asias transformation and its energy challenges have been game-changers for Australia and Asias gas industrie

167、s,leading to rapid rises in natural gas demand.Projections indicate that global demand for natural gas will grow by more than 50%,faster than any other fossil fuel,in the 25 years to 2035.Santos is well positioned with a growing portfolio and interests in both LNG supply and domestic production the

168、two activities critical to the Asia Pacifics energy security.pNG lNG oN trACK for first lNG iN 2014The PNG LNG project is over 75%complete and on track for first LNG in 2014.The project involves gas production and processing facilities at Hides in the Southern Highlands of Papua New Guinea and pipel

169、ine infrastructure to a LNG plant and load-out facility located near Port Moresby,with a capacity of 6.9 million tonnes of LNG per year.In the upstream,development drilling is underway on the first two wells of the Hides field.Meanwhile,construction is progressing at the Hides gas conditioning plant

170、,with earthworks and the major foundations complete and pipework and equipment installation progressing.The Komo airfield is nearing completion with Antonov operations expected to begin in April,meeting the required timing of the overall project schedule.The offshore section of pipeline has been com

171、pleted and over 70%of the main onshore pipeline has been welded.The major items of processing equipment are in place at the LNG plant,with the LNG tanks,flare system and load-out jetty nearing completion.In addition,the Hides Deep prospect is planned to be drilled in 2014.It is located below the exi

172、sting Hides resource.During the year,operator ExxonMobil completed a cost and schedule review for the project and advised that the project capital cost estimate had increased to US$19 billion.Foreign exchange was the largest single contributor to the increase and to a lesser extent,delays from work

173、stoppages due to community disruptions and land access led to increased construction and drilling costs.Extraordinary logistics and weather challenges also increased costs.The operator also advised that the LNG plant capacity had increased from 6.6 mpta to 6.9 mtpa,with discussions underway for sale

174、s of additional volumes.stroNG iNDoNesiA BusiNessSantos Indonesia business continues to perform strongly,accounting for 10%of company-wide production in 2012.The Wortel gas project,located offshore East Java,was delivered in January 2012 on budget,adding a third producing asset to Santos Indonesian

175、portfolio.Combined gross production from Oyong and Wortel has been 90 TJ/day,in line with expectations.Santos is seeking to sanction the Peluang project in early 2013,with an expected gross peak production of 25 TJ/day.Peluang will be developed as a tie-back to the existing Maleo asset,with start-up

176、 expected in the first half of 2014.hiGh-mArGiN vietNAm oilThe Chim So oil project,producing since October 2011,continued to perform strongly in 2012.The gross oil production rate was greater than 25,000 barrels of oil per day for the last eight months of the year,above expectations.Building on the

177、success at Chim So,the Dua oil project was sanctioned in August 2012.It involves a three-well sub-sea tie-back to Chim So and is expected to produce at a gross rate of 10,000 barrels of oil per day.The project is over 35%complete and on track for first oil in the first half of 2014.vietNAm eXplorAti

178、oN upsiDeSantos has an active exploration program underway in the Nam Con Son and Phu Khanh basins,offshore Vietnam,following promising seismic results.The Hon Khoai oil exploration well is planned for the second half of 2013,following the acquisition of 3D seismic in 2012.Located in Block 13/03 in

179、the Nam Con Son Basin,Santos is targeting a gross mean prospective resource estimate of 50-100 million barrels of oil equivalent.In Block 123 in the Phu Khanh basin,Santos completed a 3D seismic survey in June 2012 which identified a main prospect with material potential.An exploration well is plann

180、ed to be drilled in 2014,located in 1,900 metres of water.Asia PacificFocused exploration-led portfolio,led by our operations in Indonesia,Vietnam and Papua New Guinea.Santos Annual Report 2012232012 delivery2012 key statisticsPNG LNG over 75%complete and on track for first LNG in 2014.Wortel gas pr

181、oject in Indonesia delivered on budget.Chim So delivers 200%boost to Asia Pacific oil production.Dua oil project sanctioned;first oil expected in first half of 2014.Drilling at the Hides field,Papua New Guinea.Construction well-advanced at the LNG plant site,Papua New Guinea.Pipelay underway at the

182、Dua oil project,Vietnam.Production up 24%,driven by a full year of oil production from Chim So in Vietnam,partially offset by lower Indonesian gas production.EBITDAX was up 137%,driven by a full year of production from the Chim So oil asset in Vietnam.233333PRODUCTION 9.3 mmboe 201020117.97.520129.3

183、EBITDAX(excluding asset sales)$372 million 20102011111157201237224Board of DirectorsKeNNeth AlfreD DeANBCom(Hons),FCPA,FAICDAge 60.Independent non-executive Director since 23 February 2005.Chairman,Audit Committee and Member,Finance Committee of the Board.Director of Santos Finance Ltd since 2005.No

184、n-executive director of Bluescope Steel Limited since April 2009 and Chairman of Bluescopes Audit and Risk Committee.Independent non-executive director of EnergyAustralia Holdings Limited(formerly TRUenergy)since June 2012.Previously Chief Financial Officer of Alumina Limited,alternate director of A

185、lumina Limited and non-executive director of Alcoa of Australia Ltd,Alcoa World Alumina LLC and related companies(20052009).Director of Shell Australia Ltd(19972001)and Woodside Petroleum Ltd(19982004).Over 30 years experience in the oil and gas industry.Former Chief Executive Officer of Shell Finan

186、cial Services and member of the La Trobe University Council.GreGory johN wAltoN mArtiNBEc,LLB,FAIM,MAICDAge 53.Independent non-executive Director since 29 October 2009.Chairman,People and Remuneration Committee of the Board.Member,Environment,Health,Safety and Sustainability Committee of the Board.N

187、on-executive director of a number of listed and unlisted companies including Energy Developments Limited since May 2006,Iluka Resources Limited since January 2013 and Australian Energy Market Operator Limited since July 2009.Chairman and Joint Managing Partner of Prostar Capital since July 2012.Prev

188、iously Deputy Chairman of the Australian Gas Association and inaugural Chairman of the Energy Supply Association of Australia between 2004 and 2006.Past member of the Business Council of Australia and Committee for the Economic Development of Australia.Formerly Managing Director,Murchison Metals Lim

189、ited(20112012),Managing Director and CEO of AGL and Chief Executive Infrastructure at Challenger Financial Services Group.roy AleXANDer frANKliN oBeBSc(Hons)Age 59.Independent non-executive Director since 28 September 2006.Member,Environment,Health,Safety and Sustainability Committee and People and

190、Remuneration Committee of the Board.Non-executive director of Keller Group plc since July 2007 and Chairman since August 2009.Non-executive director of StatoilHydro ASA since October 2007 and of Boart Longyear Limited since October 2010.Non-executive director of Cuadrilla Resources Holdings Limited

191、since January 2012.Previously Chief Executive Officer of Paladin Resources plc(19972005)and former Group Managing Director of Clyde Petroleum plc.Chairman of BRINDEX,the trade association for UK independent oil and gas companies(20022005)and a former member of PILOT,the joint industry/UK Government

192、task force set up to maximise hydrocarbon recovery from the UK North Sea(20022005).In 2004,awarded the OBE for services to the UK oil and gas industry.DAviD johN wissler KNoXBSc(Hons)Mech Eng,MBA,FIE Aust,FTSEAge 55.Chief Executive Officer and Managing Director of Santos since July 2008,having been

193、appointed Acting Chief Executive Officer in March 2008.Joined Santos in September 2007 as Executive Vice President Growth Businesses.Member,Environment,Health,Safety and Sustainability Committee of the Board.30 years of experience in the global oil and gas industry,including as Managing Director for

194、 BP Developments in Australasia(20032007).Previously held senior positions with BP in Australia,UK and Pakistan,and management and engineering roles at ARCO and Shell in the United States,Netherlands,UK and Norway.Chairman of the Australian Petroleum Production and Exploration Association(APPEA).Boa

195、rd member,SA Botanic Gardens and State Herbarium.Member of the Business Council of Australia.Elected in November 2012 as a Fellow of the Australian Academy of Technological Sciences and Engineering.peter rolAND CoAtes AoBSc(Mining Engineering),FAICDAge 67.Appointed Chairman on 9 December 2009.Previo

196、usly an independent non-executive Director since 18 March 2008.Chairman,Nomination Committee of the Board and Santos Finance Limited Board.Member,People and Remuneration and Finance Committees of the Board.Non-executive director of Amalgamated Holdings Limited since July 2009 and non-executive direc

197、tor of Glencore International plc since April 2011.Chair,Sydney North West Rail Link Advisory Board,since December 2012.Former non-executive Chairman of Xstrata Australia Pty Ltd(20082009).Former Chairman and non-executive director of Minara Resources Ltd(20082011).Previously Chief Executive of Xstr

198、ata Coal,Xstrata plcs global coal business.Past Chairman of the Minerals Council of Australia,the NSW Minerals Council and the Australian Coal Association.Made an Officer of the Order of Australia in 2009.Awarded the 2010 Australasian Institute of Mining and Metallurgy Medal.25santos Annual Report 2

199、012jANe shArmAN hemstritChBSc(Hons),FCA,FAICDAge 59.Independent non-executive director since 16 February 2010.Member,People and Remuneration Committee and Audit Committee of the Board.Non-executive director of the Commonwealth Bank of Australia since October 2006,Lend Lease Group since September 201

200、1 and Tabcorp Holdings Ltd since November 2008.Chairman of Victorian Opera Company Ltd since February 2013(previously non-executive director since October 2010).Previously Deputy Chairman of The Global Foundation(20092012)and a member of the CEDA Research and Policy Council(20092013).Broad experienc

201、e in the oil and gas,telecommunications,government,financial services and manufacturing sectors.Spent 25 years of her career with Accenture and Andersen Consulting.Formerly Accentures Managing Director Resources Operating Group Asia Pacific,and before that,Country Managing Director Australia.Member

202、of Chief Executive Women Inc.hoCK GohBEng(Hons)Mech EngAge 57.Independent non-executive Director since 22 October 2012.Chairman of MEC Resources Ltd since October 2006,Advent Energy Ltd since November 2007 and NetGain Systems Pte Ltd(Singapore)since 2005.Non-executive director of Stora Enso Oyj(Finl

203、and)since April 2012.Previously an Operating Partner of Baird Capital Partners Asia,based in China,(2007June 2012)and non-executive director of Xaloy Holding Inc in the US(20062008).More than 30 years experience in the global oil and gas industry,having spent 25 years with Schlumberger Limited inclu

204、ding as President of Network and Infrastructure Solutions division in London,President of Asia,and Vice President and General Manager of China.Previously held managerial and staff positions in Asia,the Middle East and Europe.KeNNeth ChArles BorDALLB,BAAge 60.Independent non-executive Director since

205、14 February 2007.Chairman,Finance Committee of the Board.Member,Nomination Committee of the Board.Board member of Fullerton Funds Management,owned by Temasek,Singapore since February 2007 and member of the Asian Advisory Board of Aviva Pte Ltd(Singapore)since February 2009.Previously Chairman of Lei

206、ghton Contractors Pty Ltd(20112012 and non-executive director since 2007),director of Talent2 International Ltd(20082012)and board member of SFE Corporation(20002006)until its acquisition by the Australian Stock Exchange Ltd.Former non-executive director of Ithmaar Bank(Bahrain and Kuwait).CEO of Mi

207、ddle East and North Africa,Deutsche Bank before retirement in 2007 after 17 years of service.Formerly Regional CEO Asia Pacific,Regional CEO Middle East and CEO Australia and New Zealand,Deutsche Bank and Director of Deutsche Bank Malaysia(20022007).riChArD miChAel hArDiNGMScAge 63.Independent non-e

208、xecutive Director since 1 March 2004.Chairman,Environment,Health,Safety and Sustainability Committee of the Board.Member,Audit and Nomination Committees of the Board.Chairman of Downer EDI Limited since November 2010,non-executive director since 2008 and Deputy Chairman since July 2010.Non-executive

209、 director of Roc Oil Company Limited since June 2012.Previously Chairman of Clough Limited(20062010),Deputy Chairman of Arc Energy Ltd until 2007(appointed as non-executive director in 2003)and Chairman of the Ministry of Defence Project Governance Board Land Systems Division(Army)(20032009).Former

210、President and General Manager of BP Developments Australia Ltd with over 25 years of extensive international experience with BP.Former Vice-Chairman of APPEA.Santos Leadership TeamChristiAN pAeCh General Counsel LLB(Hons),BComChristian Paech advises the Santos Board and management on legal matters a

211、ffecting the company and its operations.He is responsible for Santos legal function,which supports the corporate team and the business units in joint venture agreements,project development,dispute resolution,statutory compliance,mergers and acquisitions,gas sales and production sharing contracts.Chr

212、istian has 20 years of legal experience and joined Santos in 2004 after working in national and international firms in Melbourne and London where he focused on large-scale corporate transactions and corporate governance.jAmes BAulDerstoNevice president eastern Australia LLB(Hons),BSc(Hons)James Baul

213、derstone is responsible for Santos activities in Eastern Australia.This includes the exploration,production,development and commercialisation of the companys oil and gas resources in central Australia,the Gunnedah Basin and offshore Victoria.James joined Santos in 2007 as General Counsel and Company

214、 Secretary after previously holding similar roles at Mayne Group and BlueScope Steel.James has 23 years of extensive legal,commercial and business development experience.Bill oveNDeNvice president exploration and subsurface(Acting)BSc Hons(Geology and Geophysics)Bill Ovenden is responsible for explo

215、ration budget and strategy,and ensuring excellence in subsurface activities across Santos upstream programs.Bill is a geologist with 30 years of experience in the oil and gas industry.He has worked on exploration projects in Australia,Central and South-East Asia,North Africa,the Middle East and Sout

216、h America,with companies including Sun Oil,Kufpec,ExxonMobil and Ampolex.He joined Santos in 2002 after working for ExxonMobil in Indonesia.DiANA hoff vice president technical and engineering BSc Petroleum Engineering Diana Hoff is responsible for drilling and completions,major projects,surface engi

217、neering,safety and environment.She has 25 years of experience with major and independent operators in the upstream oil and gas industry,including Chevron,Amoco and Questar.Diana joined Santos in 2010 as General Manager Drilling and Completions.Her career has included drilling and completions operati

218、ons,engineering and management,and production management with significant focus on regulatory processes,including environmental approvals,stakeholder engagement and mitigations to lessen impacts to air quality,water quality and surface disturbance.johN ANDersoNvice president western Australia and No

219、rthern territory LLB,BEc,GDCLJohn Anderson is responsible for Santos activities in Western Australia and the Northern Territory,including commercial and finance,business development,exploration,development and operated assets,and has held the Perth-based position since 2009.John joined Santos in 199

220、6 as Corporate Counsel for the former Queensland Northern Territory Business Unit.John has over 25 years of legal,commercial and business development experience in the oil and gas industry,including 10 years working as a solicitor with Freehills.trevor BrowNvice president QueenslandBSc(Hons)Trevor B

221、rown has end-to-end responsibility for the delivery of optimal gas supply,execution of the upstream project and upstream operations for the GLNG Project.Trevor joined Santos in 2001 from Unocal,where he was part of an active exploration team working in South-East Asia,the United States and South Ame

222、rica.Trevor has more than 27 years experience in the oil and gas industry,including 11 years in Indonesia managing onshore and offshore exploration programs.26Left to right:Christian Paech,James Baulderstone,Bill Ovenden,Diana Hoff,John Anderson,Trevor Brown,David Knox,Petrina Coventry,Peter Cleary,

223、Andrew Seaton,Rod Duke,Martyn Eames,David LimDAviD KNoX Chief Executive Officer and managing Director BSc(Hons)Mech Eng,MBA,FIEAust,FTSEDavid Knox was appointed Chief Executive Officer and Managing Director in July 2008.He has over 30 years of experience in the global oil and gas industry,and was Ma

224、naging Director for BP Developments in Australasia from 2003 to 2007.He previously held senior positions with BP in the United Kingdom and Pakistan,and management and engineering roles at ARCO and Shell in the United States,Pakistan,the Netherlands,the United Kingdom and Norway.David holds a honours

225、 degree in Mechanical Engineering from Edinburgh University and a Masters of Business Administration from the University of Strathclyde.petriNA CoveNtryChief human resources Officer BEd,Grad Dip HR,Grad Dip Phil,Master Business EthicsPetrina Coventry is responsible for the companys organisation and

226、people strategies.Prior to joining Santos in 2009,Petrina held global leadership roles for The General Electric Company,The Coca Cola Company and Proctor and Gamble.Her industry experience includes energy,oil and gas,financial services and fast-moving consumer goods.Petrina is a PhD partner with Mel

227、bourne Business School,a Vincent Fairfax Fellow,a member of the World Economic Forum Partner Against Corruption Initiative and an advisor to the Global Council of Corporate Universities.peter CleAryvice president strategy and Corporate DevelopmentBCom,LLBPeter Cleary is responsible for Santos commer

228、cial,strategy and planning,corporate development,and public affairs functions.Peter joined Santos in September 2010 from BP,where he was the President of North West Shelf Australia LNG,the LNG marketing company for the North West Shelf Venture.During his 24-year career with BP,Peter held senior mana

229、gement positions in Australia,Indonesia,Korea,Hong Kong,Abu Dhabi and the United Kingdom.Peter is currently a member of the Executive Committee of the Australia Japan Business Co-operation Committee.ANDrew seAtoN Chief Financial Officer BEng(Hons)Chemical,GradDip BusAdminAndrew Seaton was appointed

230、Chief Financial Officer in 2010,and is responsible for Santos corporate finance,accounting,taxation,treasury,investor relations,risk,audit,insurance,information systems and procurement functions.Andrew has over 25 years of oil and gas industry experience,encompassing finance,banking,commercial and e

231、ngineering roles.Prior to joining Santos in 2005,Andrew held senior positions in investment banking with Merrill Lynch and corporate banking with NAB where he worked on a broad range of M&A,equity and debt transactions.His early career included 10 years of operations,engineering design and project m

232、anagement experience.roD DuKevice president Downstream GlNG BEng(Hons)Chemical,GradDip ManagementRod Duke is responsible for leading the downstream activities of the Santos GLNG project,including the delivery of the GLNG gas transmission pipeline and the LNG plant and port projects.Rod has extensive

233、 global experience in the LNG industry and joined Santos in February 2013 from Singapore LNG Corporation,where he held the position of Senior Vice President.He has over 28 years of experience in project management,engineering,construction,commissioning,operations,commercial,marketing and business de

234、velopment areas of the upstream natural gas and LNG industry.mArtyN eAmesVice President Asia PacificBSc(Hons)Martyn Eames is responsible for Santos activities in the Asia Pacific region,and has been based in Singapore since early 2012.This includes management of Santos existing exploration,developme

235、nt and production assets in Indonesia,Papua New Guinea,Vietnam,India,Bangladesh and any future growth.Martyn joined Santos in December 2004 as Vice President Corporate and People.Before that,he spent more than 25 years with BP working in upstream commercial and management roles in Angola,Canada,Aust

236、ralia,Papua New Guinea,Norway,the United Kingdom and the United States.DAviD limCompany secretary BEc,LLB,Ch.SecDavid Lim is accountable to the Board for the effectiveness of corporate governance processes,ensuring adherence to the Boards principles and procedures and coordinating all Board business

237、,and provides the Santos Board with independent advice and support in relation to these matters.Prior to joining Santos in 2007,David had over 15 years of experience in commercial legal practice.He is an accredited Chartered Secretary.27santos Annual Report 201228Corporate GovernanceiNtroDuCtioN The

238、 Board and Management of Santos believe that,for the Company to achieve its vision of becoming a leading energy company for Australia and Asia,it is necessary for the Company to meet the highest standards of personnel safety and environmental performance,governance and business conduct across its op

239、erations in Australia and internationally.The Board has established policies and charters(“Policies”)designed to achieve the highest standards of corporate governance within Santos.The Policies,or a summary of the Policies,are publicly available on the Companys website,.The Companys Constitution,whi

240、ch was updated in 2012 to ensure consistency with current regulations and corporate practice,is also available on the website.The Companys Policies meet the requirements of both the Corporations Act 2001(Cth)(“Corporations Act”)and the Listing Rules of the Australian Securities Exchange(“ASX”).In th

241、e opinion of the Board,the Policies comply with best practice,including the ASX Corporate Governance Councils Principles and Recommendations(“ASX Principles”).Consistent with the Guide to Reporting recommendations under the ASX Principles,this Corporate Governance Statement(“Statement”)provides deta

242、ils of the corporate governance practices adopted by the Company.The table below indicates the sections of this Statement that address each of the substantive recommendations under the ASX Principles.ASX RECOMMENDATIONSHOW SANTOS SATISFIES THE RECOMMENDATION principle 1 lay solid foundations for man

243、agement and oversightEstablish and disclose the functions reserved to the Board and those delegated to management.Section 2 discusses the division of responsibilities between the Board and Management.Disclose the process for evaluating the performance of Senior Executives.Section 2.1 details how sen

244、ior executive performance is reviewed.principle 2 structure the Board to add valueA majority of the Board should be independent Directors.Sections 1.11.2 confirms that the Board comprises eight independent Directors and one executive Director.The chairperson should be an independent Director.Section

245、 1.1 confirms this and explains how the composition of the Board is determined.The roles of chairperson and chief executive officer should not be exercised by the same individual.Section 1 confirms this.The Board should establish a Nomination Committee consisting of a minimum of 3 members,the majori

246、ty being independent directors.Sections 3.13.3 set out the role and membership of the Board Committees,including the Nomination Committee.Disclose the process for evaluating the performance of the Board,its committees and individual directors.Section 1.5 details how the performance of the Board and

247、Directors is reviewed.Section 3.1 confirms that the performance of the Boards Committees is reviewed annually.principle 3 promote ethical and responsible decision-makingEstablish a code of conduct to guide the Directors,the CEO,the CFO and any other key executives.Section 5.2 provides details regard

248、ing the Santos Code of Conduct,which sets out the Companys key rules,values and guidelines.Adopt and disclose a diversity policy and set measurable objectives relating to gender diversity for disclosure in the Annual Report.The Company has adopted a Group-wide diversity policy.Further details of the

249、 Companys diversity initiatives and measurable objectives are set out in Section 5.1.Disclose the proportion of female employees in the organisation,in senior executive positions and on the Board in the Annual Report.Section 5.1 provides details of female representation levels across Santos.2012 Gov

250、erNANCe hiGhliGhts Review of Board Charter Appointment of new independent non-executive Director Update of non-executive Director letter of appointment and induction process The Board participated in two site visits and ongoing briefing programs Santos ranked at 92nd percentile in Corporate Governan

251、ce in Dow Jones Sustainability Index Policy and procedure updatesSantos Annual Report 201229Principle 4 Safeguard integrity in financial reportingThe Board should establish an Audit Committee,and structure the Committee so that it:consists only of non-executive Directors;consists of a majority of in

252、dependent Directors;is chaired by an independent chair,who is not chair of the Board;and has at least three members.Sections 3.13.3 set out the role and membership of the Board Committees,including the Audit Committee,and confirm compliance with the Audit Committee structure.The Audit Committee shou

253、ld have a formal charter.The Audit Committee operates under a Charter approved by the Board.For further details see Section 3.1 and 3.3.principle 5 make timely and balanced disclosure Establish and disclose written policies and procedures designed to ensure compliance with ASX Listing Rule disclosur

254、e requirements and to ensure accountability at a senior management level for that compliance.Section 5.4 outlines the written policies and processes Santos has adopted to ensure compliance with its continuous disclosure obligations.principle 6 respect the rights of shareholders Design and disclose a

255、 communications strategy to promote effective communication with shareholders and encourage effective participation at general meetings.Section 5.4 summarises the Companys shareholder communication policies.principle 7 recognise and manage risk Establish policies for the oversight and management of

256、material business risks and disclose a summary of those policies.Sections 4.14.3 summarise the Companys risk management systems,including reporting to the Board on risk,and provide examples of how business risks are managed.Require management to design and implement the risk management and internal

257、control system to manage the companys material business risks and report to the Board on whether those risks are being managed effectively.Sections 4.14.3 summarise the Companys risk management systems,including reporting to the Board on risk,and provide examples of how business risks are managed.Di

258、sclose whether the Board has received assurance from the CEO and the CFO that the declaration provided under s295A of the Corporations Act is founded on a sound system of risk management and internal control that is operating effectively in all material respects in relation to financial reporting ri

259、sks.Section 4.2 confirms that the Board has received such assurance for the 2012 financial year.principle 8 remunerate fairly and responsibly The Board should establish a remuneration committee.Sections 3.13.3 set out the role and membership of the Board Committees,including the People and Remunerat

260、ion Committee.Distinguish the structure of non-executive Directors remuneration from that of executive Directors and Senior Executives.Further information regarding the structure and details of the remuneration paid to Directors,the CEO and other Senior Executives is set out in the Remuneration Repo

261、rt on pages 5875 of this Annual Report.30Corporate Governance(continued)pArt 1:CompositioN of the BoArD Relevant policies and charters See Board Charter Company Constitution The composition of the Board is determined in accordance with the Companys Constitution and the Board Charter which,among othe

262、r things,require that:the Board comprises a minimum of five directors(exclusive of the Chief Executive Officer and Managing Director(“CEO”),and a maximum of ten directors;the Board should comprise a substantial majority of independent,non-executive Directors;there should be a separation of the roles

263、 of Chairman and CEO of the Company;the Chairman of the Board should be an independent,non-executive Director;and performance of the Board,its members and Committees should be reviewed annually.The Board Charter was reviewed and updated in 2012.In 2012,the Board undertook a review of the Board Chart

264、er(previously called the Board Guidelines)with a focus on plain language and ensuring that it maintained best market practice.The revised Board Charter has been published on the Companys website.1.1 Director independence The Board has adopted the definition of independence set out in the ASX Princip

265、les.Having regard to this definition,the Board generally considers a Director to be independent if he or she is not a member of Management and is free of any interest and any business or other relationship which could,or could reasonably be perceived to,materially interfere with the Directors abilit

266、y to act in the best interests of the Company.The Board will assess the materiality of any given relationship that may affect independence on a case-by-case basis and has adopted materiality guidelines to assist in that assessment.Under these guidelines,the following interests are regarded as materi

267、al in the absence of any mitigating factors:a holding of 5%or more of the Companys voting shares or a direct association with an entity that holds more than 5%of the Companys voting shares;or an affiliation with an entity which accounts for 5%or more of the revenue or expense of the Company.Each Dir

268、ectors independence is assessed by the Board on an individual basis,with reference to the above materiality guidelines and focusing on an assessment of each Directors capacity to bring independence of judgement to Board decisions.In this context,Directors are required to provide a standing notice of

269、 interests to the Board and to make prompt disclosure to the Board of any changes in interests in contracts,family ties and cross-directorships that may be relevant in considering their independence.Directors must declare any conflict of interest that they may have,at the start of all Board meetings

270、.Where a material personal interest arises with respect to a matter that is to be considered by the Board,the Director is required to declare that interest and must not take part in any Board discussion or vote in relation to that matter,unless permitted in accordance with the Corporations Act.In ad

271、dition to a standing Board agenda item for declarations of changes to Directors interests,Directors standing notices of interests were last refreshed in 2012,tabled at a Board meeting and minuted,and copies distributed to all Directors.A standing notice for the new Director appointed during the year

272、 was tabled for consideration prior to the Boards confirmation of his appointment and he similarly received copies of all other Directors standing declarations of interests.Taking into account each Directors standing notices and subsequent declarations,the Board considers that all non-executive Dire

273、ctors are independent.BOARD COMPOSITIONNumbers of Directors8 Independent non-executive Directors1 Executive Director(Chief Executive Officer and Managing Director)Currently,the Board comprises eight non-executive Directors,all of whom are considered independent under the principles set out above,and

274、 one executive Director(the CEO and Managing Director).1.2 Board capabilities In determining the composition of the Board,consideration is given to the optimal mix of background,skills and experience that will position the Board to guide the Company.As the needs of the Board are dynamic,these skills

275、 and experiences may change over time.The following diagram shows how the Companys programs and systems(described in further detail in sections 1.31.5)support Santos in building an effective Board,with the breadth and depth of background,skills and experience necessary to guide the Companys strategi

276、c growth plans.Santos Annual Report 201231DefiNiNG reQuireD sKills AND eXperieNCeiDeNtifyiNG AreAs for further DevelopmeNtimproviNG BoArD effeCtiveNessIn order to ensure that the skills and experience available on the Board align with Santos goals and strategy the Board considers requirements arisin

277、g from:Current business plan and operations Future growth plansAreas for further development,as well as skills and experience that would complement existing skills and experience,are identified by:Board performance review to assess current capabilities Nomination Committee consideration of successio

278、n planningSteps taken to improve the Board include:Development and briefings to enhance Board effectiveness Recruitment of new Directors to complement existing Board capabilitiesKey ACtioNs iN 2012 Ongoing review Strategic planning meeting Internal review conducted in late 2011/early 2012 and result

279、s reported to the Board in May 2012 External review commenced in late 2012,to be completed in early 2013 Briefing sessions for Directors on a wide range of issues Site visits to GLNG,Gunnedah and Narrabri Appointment of new independent non-executive DirectorThe current Board comprises nine Directors

280、 from diverse backgrounds with a range of business experience,skills and attributes.The following charts demonstrate the primary skills and experience of the current Directors across several dimensions that are relevant to Santos as a leading energy Company.EDUCATIONAL QUALIFICATIONSNumbers of Direc

281、torsScience/Engineering Finance/Accounting Legal/Humanities Science/Engineering and Finance/Accounting Finance/Accountingand Legal/Humanities INDUSTRY EXPERIENCENumbers of DirectorsResources Resources and Services*Resources and Services*and Finance Finance and Services*Professional or Technical Serv

282、ices GEOGRAPHICAL EXPERIENCENumbers of DirectorsAustralia,Asia Pacificand Other Australia and Other Asia Pacific and Other Other The names and details of the experience,qualifications,special responsibilities(including Committee memberships),and term of office of each Director of the Company and the

283、 Company Secretary can be found on pages 2427 of the Annual Report.1.3 Director selection and succession planning The Board renewal process is overseen by the Nomination Committee and involves regularly reviewing the composition of the Board to ensure that the Directors bring to the table an appropr

284、iate mix of experience,skills and backgrounds relevant to the management of a leading energy company.The framework for the Nomination Committees ongoing considerations of Board composition,as specified in the Board Charter,is that:Directors should be appointed primarily based on their capacity to co

285、ntribute to the Companys development;the Board should include at least some members with experience in the upstream oil and gas and/or resources industries;and in determining the composition of the Board,consideration should be given to succession planning,board renewal and the optimal mix of backgr

286、ound,skills,experience and diversity that will position the Board to guide the Company.32Corporate Governance(continued)The Board Charter also includes the following principles:nomination for re-election is subject to review by the Nomination Committee and endorsement by the Board;there should be ap

287、propriate circumstances justifying nomination for re-election after a Director has served for 12 years(e.g.Chairmanship or special skills);and the contribution of the Board,Board Committees,and of individual Directors is the subject of formal review and discussion in accordance with the process set

288、out below.In making recommendations relating to Board composition,the Nomination Committee takes into account both the current and future needs of the Company.The Nomination Committee specifically considers each of the Directors coming up for re-election and makes an assessment as to whether to reco

289、mmend their re-appointment to shareholders.This assessment considers matters including their contribution to the Board,the results of Board and Committee reviews,and the ongoing needs of the Company.The Committee also takes into account the succession plans of the Directors more broadly.Where a pote

290、ntial gap is identified in the backgrounds,experiences or skill sets that are considered desirable or necessary for the Boards continued effectiveness,this information is used to inform the selection of new Director candidates.The Nomination Committee is responsible for defining the desired attribut

291、es and skill sets for a new Director and the services of an independent consultant are then used to assist in the identification and assessment of a range of potential candidates based on a brief from the Nomination Committee.The Nomination Committee reviews prospective candidates,then makes recomme

292、ndations to the Board regarding possible appointments of Directors,including recommendations for appointments to Committees.1.4 Director induction and continuing education Prior to appointment,each Director is provided with a letter of appointment which includes copies of the Companys Constitution,B

293、oard Charter,Committee Charters,relevant policies and functional overviews of the Companys strategic objectives and operations.The expectations of the Board in respect to a proposed appointee to the Board and the workings of the Board and its Committees are also conveyed in interviews with the Chair

294、man.Induction procedures include site visits and access to appropriate executives in relation to details of the business of the Company.The existing practices of providing new directors with a formal letter of appointment setting out their rights,duties and responsibilities and ensuring that they re

295、ceive a comprehensive induction program,including business briefings by Management and site visits,has now been explicitly recognised in the revised Board Charter.The letter of appointment was reviewed and updated in October 2012,as were the Companys induction procedures.Directors are encouraged by

296、the Board to continue their education by attending both internal and external training and education relevant to their role.Board site visits in 2012 to GLNG,Gunnedah and Narrabri.During 2012,the Directors participated in briefing sessions on a broad range of issues,including global oil and gas indu

297、stry trends,crude oil pricing,global LNG supply and demand,global exploration outcomes and trends,and the national Work Health Safety Act 2011(Cth).Directors also attended site visits to GLNG and to Gunnedah and Narrabri,including engagement with local community business and government leaders.In ad

298、dition,Board meetings have been held at various Santos offices including in Adelaide,Sydney,Brisbane and Singapore,giving the opportunity for familiarisation with each locations operations and personnel,and presentations from the local management team.1.5 review of board and director performance As

299、specified in the Board Charter,reviews of Board,Committee and individual Director performance are conducted annually.At least once every three years,the annual review of the Board and individual Directors is carried out by an independent consultant.The scope of the external review is agreed in advan

300、ce with the Board.Internal reviews are facilitated by the Chairman,in consultation with the Nomination Committee,and involve questionnaires and formal interviews with each Director culminating in a written report prepared by the Chairman.The last external review of the Board as a whole concluded in

301、2011 and a number of initiatives were introduced as a result,including the initiation of a strategic five year review,broadening the remit of the People and Remuneration Committee and increasing the Boards engagement with upcoming talent within the Company as well as the key stakeholders in the Comp

302、anys business.An internal review of the Board,each Committee and individual Directors was carried out in early 2012.This review included feedback from all Directors on the workings of the Board as a whole,as well as from senior executives.It included a review of the performance,structure,objectives

303、and purpose of the Board Committees.The review addressed:the Boards contribution to strategy and policy;interaction between the Board and Management;the Boards processes to monitor business performance and compliance;risk management;Board composition and structure;and the operation and conduct of th

304、e Board.Santos Annual Report 201233Internal Board Review processINTERNALBOARDREVIEWImplement initiatives to improve Board effectiveness Review performance,structure,objectives and the purpose of Board CommitteesFeedback from Directors and review of individual Director performanceFeedback from Senior

305、 ExecutivesThe results of the review were reported to the Board in May 2012 and as a result of this review,a number of initiatives,including additional scheduled site visits,were introduced in 2012 to ensure the continued effectiveness of the Boards performance and enable its sustained focus on key

306、issues for the Company.In the latter part of 2012 the Board commenced its periodic external Board performance review,engaging a specialist corporate governance consultancy firm to assist with the review.The review examined the workings,performance and effectiveness of the Board and the Boards Commit

307、tees.In undertaking the review,one-on-one interviews were conducted with each member of the Board and members of the Companys Senior Executive team who interact regularly with the Board.The external consultant also sat in and observed the conduct of part of a Board meeting,including interactions of

308、the Senior Executives with the Board and the operation of the Board generally during a Board meeting.At the date of this Report,the external review is in its final stages.The Board will shortly discuss the key findings from the review and consider recommendations for addressing the opportunities ide

309、ntified by the review.pArt 2:BoArD respoNsiBilities Relevant policies and charters See Board Charter The updated Board Charter was approved in December 2012 following a review.It incorporates,consolidates and updates key elements from the Board Guidelines,as the Charter was previously known,as well

310、as the Role of the Board document adopted by the Board a number of years ago,in relation to the Boards role and responsibilities.The Boards overriding objective is defined in the Board Charter as“to safely and sustainably increase shareholder value within a business framework which protects sharehol

311、ders interests”.The Board seeks to ensure that Management implements sound strategies and develops an integrated framework of risk management and control.2.1 responsibilities The Board is responsible for the overall corporate governance of the Company,including approving the strategic direction and

312、financial objectives,oversight of the performance and operations of the Company,establishing goals for Management and monitoring the attainment of these goals.Each Director is required to ensure that they are able to devote sufficient time to discharge their duties and to prepare for Board and Commi

313、ttee meetings and associated activities.The Board Charter confirms that the Company Secretary,through the Chairman,is accountable to the Board for the effectiveness of corporate governance processes,ensuring adherence to the Boards principles and procedures and coordinating all Board business.All Di

314、rectors have direct access to the Company Secretary.34Corporate Governance(continued)The Companys Delegation of Authority was the subject of an extensive review in the first half of 2012,with a view to simplification and incorporation of increased accountability by personnel exercising their delegat

315、ed authority,whilst reducing unnecessary red tape.A substantially restructured,simplified and updated version was adopted in June 2012.The new Delegation of Authority incorporates increased accountability for personnel exercising delegated authority.Regular Senior Executive performance evaluations a

316、re undertaken.An important aspect of the Boards responsibilities is the evaluation of the Companys executives.Performance evaluation of Senior Executives is undertaken twice a year by the CEO.The Chairman undertakes the CEOs annual review and reports the outcome to the People and Remuneration Commit

317、tee.The results of these reviews are used in determining future remuneration in consultation with the People and Remuneration Committee,and generally for review by the Board in relation to Management succession planning.Performance reviews were conducted in accordance with this process for each of t

318、he Senior Executives,including the CEO,during the year.These reviews impacted on the short term incentives for the Senior Executives and included the following criteria:analysing performance against agreed measures;examining the effectiveness and quality of the individual in their given role;assessi

319、ng key contributions;identifying areas of potential improvement;and assessing whether expectations of shareholders and other stakeholders have been met.Details of the remuneration received by the CEO and Senior Executives,including short-and long-term incentives relating to Company and individual pe

320、rformance targets,are set out in the Remuneration Report commencing on page 58 of the Annual Report.Details of non-executive Director remuneration are also set out in the Remuneration Report.the Board is responsible for:overseeing the Companys strategic direction and management of the Company;approv

321、ing the annual capital and operating budget;approving delegations of authority to Management;approving significant acquisitions and disposals of assets;approving significant expenditure decisions outside of the Board-approved corporate budget;approving and monitoring financial performance against st

322、rategic plans and corporate budgets;approving ethical standards and codes of conduct;selection,evaluating and succession planning for Directors,the CEO and Company Secretary and generally endorsing the same for the CEOs direct reports;setting the remuneration of Directors and the CEO and generally e

323、ndorsing of the same for the CEOs direct reports;and overseeing the integrity of risk management processes and systems.Delegation of AuthorityThe Board delegates management of the Companys resources to the Companys executive management team under the leadership of the CEO,to deliver the strategic di

324、rection and goals approved by the Board.This is formally documented in the Companys Delegation of Authority.responsibilities delegated by the Board to management:the conduct and operation of the Companys business in the ordinary course;implementing corporate strategies;and operating under approved b

325、udgets and written delegations of authority.Santos Annual Report 2012352.2 indemnity,access to information and independent professional advice The Board Charter sets out the circumstances and procedures pursuant to which a Director may seek independent professional advice at the Companys expense.Tho

326、se procedures require prior consultation with,and approval by,the Chairman and assurances as to the qualifications and reasonableness of the fees of the relevant adviser.A copy of the advice and letter of instruction is usually required to be provided to the Board.Pursuant to a deed executed by the

327、Company and each Director,a Director also has the right to access all documents which have been presented to meetings of the Board or to any Committee of the Board or otherwise made available to the Director whilst in office.This right continues for a term of seven years after ceasing to be a Direct

328、or,or such longer period as is necessary to determine any relevant legal proceedings that commenced during that term.Information in respect of indemnity and insurance arrangements for Directors and certain Senior Executives appears in the Directors Report on page 76 of this Annual Report.pArt 3:BoAr

329、D Committees Relevant policies and charters See Audit Committee Charter Environment,Health,Safety and Sustainability Committee Charter Finance Committee Charter Nomination Committee Charter People and Remuneration Committee Charter 3.1 role and membership The Board has established a number of Commit

330、tees to assist with the effective discharge of its duties.The membership and role of each Committee is set out below and in Section 3.3.All Committees are chaired by and comprise only non-executive,independent Directors,except the Environment,Health,Safety and Sustainability Committee,which includes

331、 the CEO as a member in accordance with the Charter of that Committee.Other composition requirements specific to each Committee are set out on the following page and in Section 3.3.Non-Committee members may attend Committee meetings by invitation.Each Committee operates under a specific charter appr

332、oved by the Board.Board Committees conduct their own internal review of their performance,structure,objectives and purpose from time to time.A revised Charter for the Environment,Health,Safety and Sustainability Committee was adopted in February 2012,following a review by that Committee.This updated

333、 the Charter in line with changes brought about by the new Work Health Safety Act 2011(Cth).An indicative annual schedule of matters for consideration by the Committee was also added,as part of consolidation of safety due diligence principles endorsed by the Board.Board Committees have access to internal and external resources,including access to advice from independent external consultants or spe