Santos Ltd (STO) 2011年年度報告「ASX」.pdf

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1、workng n partnershpannual report 2011ABOUT SANTOSEstablished in 1954,Santos core foundations are based on safe,sustainable operations and working in partnership with host communities,governments,business partners and shareholders.Santos is one of the largest producers of natural gas to the Australia

2、n domestic market,supplying to all mainland states and territories as well as to Indonesia and other domestic Asian markets.Santos has also developed significant oil and liquids businesses in Australia,Indonesia and Vietnam,with recent developments including the Chim So oil project in Vietnam delive

3、red in 2011.Santos is pursuing a transformational liquefied natural gas(LNG)strategy and has interests in four LNG projects,including the two-train Santos GLNG project in Gladstone,Australia.Through its interest in the Darwin LNG project,Santos has been exporting LNG to Asia since 2006.First LNG shi

4、pments are expected from PNG LNG in 2014 and from the GLNG project in 2015.Santos fourth LNG project is the proposed Bonaparte floating LNG project offshore northern Australia,which is currently in the design phase.At 152,360 square kilometres,Santos Australian exploration and production acreage is

5、the largest by area of any company.Santos has over 2,800 employees across Australia and Asia,with offices in Adelaide,Bishkek,Brisbane,Dhaka,Gladstone,Gunnedah,Hanoi,Jakarta,New Delhi,Perth,Port Moresby,Roma,Sydney and Singapore.Santos 2011 total production was 47.2 million barrels of oil equivalent

6、(mmboe),and as at 31 December 2011 Santos had a substantial proven plus probable(2P)reserve base of approximately 1,364 mmboe.Santos is a leading Australian oil and gas exploration and production company,with operations and interests in every major Australian petroleum province and in Indonesia,Viet

7、nam,Papua New Guinea,Bangladesh,India and Central Asia.VISION AND STRATEGYSantos vision is to be a leading energy company in Australia and Asia,and the company has a robust strategy to achieve this by:Continuing to be a leading Australian domestic producer.Strong 50-year track record of safe,sustain

8、able operations.Presence in every major Australian hydrocarbon basin,with oil,conventional gas and unconventional gas assets.Increasing exposure to oil-linked gas prices.Delivering a unique LNG portfolio from existing resources.GLNG upstream operator of the two-train project with first LNG exports e

9、xpected in 2015.PNG LNG construction underway,with first LNG exports expected in 2014.Darwin LNG LNG production since 2006 with potential for brownfield expansion.Bonaparte LNG innovative floating LNG project in the Bonaparte Basin.Building a focused,exploration-led Asian portfolio.Established Indon

10、esian business with a record of project delivery.Chim So oil project in Vietnam delivered,with further growth potential.Significant drilling program planned,with exciting opportunities including Indonesia,Bangladesh and Vietnam.VALUESWe are a team that:Discovers by opening our minds to new possibili

11、ties,thinking creatively and having the courage to learn from successes and failures,to take on new challenges,to capture opportunities and to resolve problems.Collaborates by recognising the value and power in diversity of thought and communicating openly to understand the perspectives of others;de

12、monstrating leadership by sharing what we know and respectfully challenging each other to achieve the best results for all.Delivers by taking personal responsibility and pride in our work to deliver timely,quality results that benefit Santos and help achieve our vision and strategy.Cares by taking t

13、he long-term view to build a sustainable future for our company,our people and the environments and communities in which we operate.Mutineer-Exeter oil field,Carnarvon Basin,Western Australia.As pioneers of the Australian gas industry for more than half a century,we know that effective leadership re

14、lies on respectful partnerships with our people,governments and the communities in which we operate.It is through our commitment to forging enduring partnerships that we ensure our enduring leadership and continued success.4Review by Peter Coates and David Knox Delivering on our promises in 2011.161

15、4Transforming through LNGDelivering a unique LNG portfolio from existing resources.Building the baseContinuing to be a leading Australian domestic producer.This 2011 Annual Report is a summary of Santos operations,activities and financial position as at 31 December 2011.All references to dollars,cen

16、ts or$in this document are to Australian currency,unless otherwise stated.An electonic version of this report is available on Santos website, about this report18Delivering new growthBuilding a focused exploration-led Asian portfolio.20Operating responsibly Integrating sustainability into business st

17、rategy.Cover:Field Engineer,Paul Michell,and Oil Team Leader,Tom Thurgood,near Tirrawarra in the Cooper Basin,South Australia.This page:Countryside near Fairview,eastern Queensland.2 Operating and financial highlights 4 Review by Peter Coates and David Knox 7 Production statistics 8 Reserves statist

18、ics 10 Review by Chief Financial Officer 12 World of Santos 14 Australia 16 LNG projects 18 Asia 20 Sustainability 22 Board of directors 24 Santos leadership team 26 Corporate governance 43 Organisation chart 44 Santos Group interests 46 10-year summary 49 Directors report 59 Remuneration report 76

19、Financials 163 Information for shareholders 166 Index 167 Glossary 168 Major announcements made in 2011 2saNTOs ANNUAL report 2011operating and financial highlights14%Sales revenue$2,530 million27%eBItDAX$2,126 million51%Net profit after tax$753 million20112010%changeProduction volume(mmboe)47.249.9

20、(5)Sales volume(mmboe)57.159.2(4)Sales revenue($million)2,5302,22814EBITDAX($million)2,1261,67227Net profit after tax($million)75350051Underlying net profit after tax($million)45337620Operating cash flow($million)1,2531,273(2)Earnings per share(cents)84.859.742Dividends declared per ordinary share(c

21、ents)30.037.0(19)Safety performance(TRCFR)3.33.320092008200720102011PRODUCTION VOLUME47.2 mmboe010203040506054.454.459.149.947.220092008200720102011SALES VOLUME57.1 mmboe01020304050607060.155.858.259.257.1Production was in line with guidance and down 5%,primarily due to the sell-down of a 15%interes

22、t in the GLNG project.Sales volumes were down 4%,with lower production offset by higher third-party product sales.saNTOs ANNUAL report 201135%production47.2 mmboe20%Underlying net profit after tax$453 million2%operating cash flow$1,253 million20092008200720102011SALES REVENUE$2,530 million05001,0001

23、,5002,0002,5003,0002,1812,7622,4892,2282,53020092008200720102011EARNINGS&DIVIDENDS PER SHARE84.8 cents050100150200250252405142523760308542Dividends declared per shareEarnings per share20092008200720102011NET PROFIT AFTER TAX$753 million05001,0001,5002,0004341,65035950075320092008200720102011OPERATIN

24、G CASH FLOW$1,253 million03006009001,2001,5001,1551,3851,2141,2731,25320092008200720102011UNDERLYING NET PROFIT AFTER TAX$453 million010020030040050060025754840537645320092008200720102011SAFETY PERFORMANCE3.301234563.65.85.33.33.3Total recordable case frequency rate(per million hours worked)Sales re

25、venue increased by 14%due to higher oil and gas prices,offset by lower sales volumes and the stronger Australian dollar.The total 2011 dividend of 30 cents is down 19%,which reflects the companys funding strategy to deliver its growth program.Net profit after tax was up 51%,driven by higher commodit

26、y prices and the sell-down of interests in the GLNG project and in Evans Shoal.Operating cash flow was down 2%,as the impact of higher commodity prices was offset by higher taxes paid.Underlying net profit increased by 20%,with higher commodity prices offset by lower production and a higher effectiv

27、e tax rate.2011 was the equal best safety performance in the companys history,with the record best combined contractor performance rate.4saNTOs ANNUAL report 2011L to R:David Knox and Peter Coatesreview by Peter Coates and David KnoxChairman and Chief Executive Officer2011 was highlighted by strong

28、project delivery and good operational and financial results.saNTOs ANNUAL report 20115Dear shareholder,Your company performed well during 2011 with higher full-year net profit and underlying net profit,continued improvement in safety and strong project delivery.We continued to generate strong cash f

29、lows to fund our material pipeline of growth projects and to provide your returns.Our net profit after tax of$753 million was up 51%on the previous year.This included one-off items such as the sale of a 15%interest in the Santos GLNG Project and our entire stake in the undeveloped Evans Shoal gas fi

30、eld.It also includes some asset impairments.If we exclude the impact of these and similar items,underlying profit was up 20%to$453 million.This higher profit was primarily due to higher oil and gas prices,offset by a stronger Australian dollar and a higher tax rate.In 2012,we have ahead of us anothe

31、r exciting year,both for project delivery and with the exploration and evaluation drill-bit.Our strategy is to unlock the companys significant resources in a rising market for oil and gas demand in Asia and Australia.We have the skills,teamwork and commitment to deliver on our plans safely,profitabl

32、y and sustainably.SAfETY AND SUSTAINABILITYSantos safety performance has improved by 40%over the past three years,with a total recordable case frequency rate(a standard industry measure)of 3.3 recordable injuries per million hours worked in 2011.This is the equal best safety performance in the compa

33、nys history.Santos Sustainability Report 2011,which includes a dedicated section on coal seam gas(CSG),is designed to complement this Annual Report,and is also available online at encourage you to read the report and find out more about what sustainability means to Santos and what we are doing to ac

34、hieve it.fOCUS ON CSGWe are committed to maintaining our 50-year track record of safe,responsible and sustainable gas exploration and production activities,including more than 15 years of CSG operations in Queensland.There has been considerable public discussion about CSG and we acknowledge the legi

35、timate concerns held by some in the community.The expansion of Australias CSG industry is bringing new jobs,widespread economic benefits,cleaner energy,greater energy security and other benefits such as making treated water from coal seams available to farmers and local communities.We are listening

36、to community concerns and know we will not be successful in building our CSG business unless those concerns can be addressed.Santos is one of the coal seam gas industrys most experienced operators.Our core foundations are built on respectful relationships with landowners,responsible stewardship of t

37、he environment and water resources,and strong partnerships with communities.We always seek access to land through the informed agreement of landowners,and act reasonably at all times.MEETING AN ENERGY ChALLENGEAt Santos,we will play a role in delivering the benefits of natural gas to Australians and

38、 the energy-hungry markets of Asia.Natural gas is an important part of the global energy market,providing a fuel source that is abundant and available now to underpin the transition to a low carbon economy.Santos is one of Australias largest producers of natural gas for domestic consumption.Its thro

39、ugh this strong Australian base that we can support Australia and Asias energy needs.Australia has the gas resources to supply its domestic market and also give a massive boost to the LNG export market,which will help fuel Asias economic growth.The Cooper Basin has been our heartland for more than 4

40、0 years.We are pleased to report that the Cooper has many years of life left in it.To unlock that potential,we are applying new technology,particularly in the areas of drilling rigs and multi-pad drilling.Initial results have been successful and contributed to the largest annual gas reserves upgrade

41、 in the Cooper Basin for 10 years.During the year,we completed the acquisition of Eastern Star Gas Limited via a recommended Scheme of Arrangement,together with the on-sale of a 20%interest in Eastern Stars permits in the Gunnedah Basin to TRUenergy.The acquisition gives Santos the largest natural g

42、as reserves position in New South Wales,a state that currently imports most of its natural gas from other states.With our partner TRUenergy,we plan to invest$500 million in the Gunnedah Basin over the next three to four years to further explore the potential of this resource.We are also building a m

43、aterial gas business in Western Australia,where,in conjunction with our partner Apache Energy,we commissioned the new Devil Creek domestic gas plant in 2011.Supplied with gas from 6saNTOs ANNUAL report 2011Review by Peter Coates and David Knox(continued)our offshore Reindeer field,Devil Creek is the

44、 first gas plant development in the state in 15 years and brings new supply capacity and greater energy security to the state.In Asia,we produce gas for domestic consumption in Indonesia,Bangladesh and Vietnam.POSITIONED fOR fUTURE GROwThConsistent delivery of Santos strategy has positioned the comp

45、any for growth in the years ahead,with production expected to reach over 80 mmboe by 2020.This compares to 47 mmboe in 2011.Part of this growth will come from production from new assets commissioned during 2011 and early 2012.These included the Reindeer and Spar gas projects in Western Australia,the

46、 Chim So oil project in Vietnam and the Wortel gas project in Indonesia.Importantly,all of these projects were delivered on or under their sanctioned budgets a strong performance by Santos and our partners during a time of inflationary cost pressures across our industry.Our LNG projects are progress

47、ing well,with PNG LNG and GLNG on track for first production in 2014 and 2015 respectively,in line with their sanction targets.These projects will deliver on the strategic vision to transform Santos into a significant exporter of LNG.You can read more about our LNG projects on pages 16 to 17 of this

48、 Annual Report.STRONG POSITION TO fUND GROwThWe are in a strong position to fund our growth,with$7.5 billion of cash and available credit facilities at 31 December 2011.A key element in determining the right funding strategy is the level of dividends.Given the significant commitment to funding our k

49、ey LNG growth projects over the next few years,the Board made the decision to reduce the dividend in 2011.This was necessary to strike an appropriate balance between funding growth and continuing to pay a meaningful dividend to shareholders.In line with this policy,the dividend for the year ending 3

50、1 December 2011 was 30 cents per share fully franked.The Board anticipates that the annual dividend will remain at this level during our capital intensive growth phase between now and 2015.Following that,the Board will look to increase the dividend as soon as appropriate.We remind shareholders that

51、Santos continues to offer a Dividend Reinvestment Plan(DRP)that enables shareholders to increase their shareholding at a 2.5%discount to the market price and without brokerage.EMPLOYEES AND ThE BOARDWe would like to express our appreciation to our fellow Directors for the commitment and dedication t

52、hey bring to the Santos Board.We would also like to thank our employees who have rallied to support their local communities,be it during the flooding in Queensland at the beginning of 2011 and again in 2012,or through volunteering during the year.On behalf of the Directors,we would like to thank all

53、 Santos employees for their hard work and dedication in continuing to deliver value to our shareholders.Peter Coates AO Chairman David Knox Chief Executive Officer and Managing DirectorSANTOS PRODUCTION OUTLOOK 020406080100201220112013 2014 2015 2016 2017 2018 2019 2020SanctionedLikely sanctionProdu

54、cingmmboeApr2011Jan2011Jul2011Oct2011Jan2012708090100110120130SANTOS VS ASX 100 INDEX RELATIVE PERFORMANCE January 2011 February 2012 Santos(STO)ASX 100Values are indexed to base 100 from 4 January 2011.saNTOs ANNUAL report 20117production statistics Total 2011 Total 2010 Field unitsmmboeField units

55、mmboeSales gas,ethane and LNG(PJ)Cooper 66.1 11.4 66.6 11.4 Otway/Gippsland 19.0 3.3 19.2 3.3 Surat/Bowen 14.2 2.4 14.4 2.5 GLNG 9.0 1.6 19.6 3.4 Amadeus 0.7 0.1 1.6 0.3 Gunnedah 0.2 0.0 0.1 0.0 Carnarvon 45.5 7.8 47.7 8.2 Bonaparte 14.7 2.6 15.0 2.6 Indonesia 33.9 5.8 38.2 6.5 Bangladesh 3.5 0.6 3.

56、8 0.7 Total production 206.8 35.6 226.2 38.9 Total sales volume 265.8 45.7 277.7 47.7 Total sales revenue($million)1,252.5 1,196.9 Condensate(000 bbls)Cooper 1,072.0 1.0 945.8 0.9 Amadeus 24.1 0.0 25.9 0.0 Otway 19.5 0.0 23.5 0.0 Surat/Bowen 2.8 0.0 4.3 0.0 Bonaparte 1,291.9 1.2 1,367.0 1.3 Carnarvo

57、n 502.4 0.5 474.4 0.5 Indonesia 5.2 0.0 3.8 0.0 Bangladesh 0.6 0.0 0.4 0.0 Total production 2,918.5 2.7 2,845.1 2.7 Total sales volume 2,919.6 2.7 3,009.1 2.8 Total sales revenue($million)303.2 253.1 Total 2011 Total 2010 Field unitsmmboeField unitsmmboeCrude oil(000 bbls)Cooper 2,831.4 2.8 2,557.8

58、2.6 Amadeus 112.7 0.1 86.3 0.1 Surat/Bowen 89.6 0.1 84.1 0.1 Stag 1,677.2 1.7 1,430.6 1.4 Mutineer-Exeter 669.5 0.7 572.6 0.6 Barrow 526.0 0.5 561.1 0.5 Thevenard 235.5 0.2 254.0 0.2 Vietnam 680.6 0.7 -Indonesia 269.9 0.3 578.8 0.6 SE Gobe 77.5 0.1 93.2 0.1 Other1-308.7 0.3 Total production 7,169.9

59、7.2 6,527.2 6.5 Total sales volume 6,990.2 7.0 6,797.5 6.8 Total sales revenue($million)803.6 593.8 LPG(000 t)Cooper 134.4 1.1 132.7 1.1 Surat/Bowen 0.0 0.0 0.1 0.0 Bonaparte 75.2 0.6 77.7 0.7 Total production 209.6 1.7 210.5 1.8 Total sales volume 198.4 1.7 224.5 1.9 Total sales revenue($million)17

60、1.0 184.1 TOTAL Production(mmboe)47.2 49.9 Sales volume(mmboe)57.1 59.2 Sales revenue($million)2,530.3 2,227.9 1 Includes Jabiru,Challis and Legendre which ceased production in 2010.8saNTOs ANNUAL report 2011reserves statisticsOur significant reserve and resource position,combined with existing infr

61、astructure,leaves Santos strategically well placed to supply the growing demand for natural gas in Australia and Asia.200920082007201020112P RESERVES1,364 mmboe03006009001,2001,5001,4401,0138791,4451,364AcquisitionsanddivestmentsAdditionsReservesyear end2010Production Reservesyear end20112P RESERVES

62、 RECONCILIATION03006009001,2001,500(116)821,4451,364(47)mmboe2P RESERVES BY PRODUCTCrude oil 5%LPG 2%Condensate 5%Sales gas 88%2011 was the first year in eight years that Santos total reserves decreased,with net acquisitions and divestments during 2011 reducing 2P reserves by 116 mmboe.Additions of

63、82 mmboe were primarily driven by strong growth in Cooper Basin gas reserves.The 116 mmboe decrease for acquisitions and divestments is due to the 15%sell-down of the GLNG project and the completion of the transfer of some of the GLNG upstream permits,partially offset by the Eastern Star Gas acquisi

64、tion.Sales gas reserves comprise 88%of 2P reserves and over 90%of 2C contingent resources.RESERVES(SANTOS ShARE)Year end 2010ProductionAdditionsAcquisitions/Year end 2011(mmboe)divestments 1P reserves646-4780-306492P reserves1,445-4782-1161,3642C contingent resources2,261012-1112,162PROVEN PLUS PROB

65、ABLE RESERVES(SANTOS ShARE)YEAR END 2011 BY AREAAreaEastern AustraliaCooper Basin1,13029192,350262Southern Australia3580539869Queensland CSG1,760000303Queensland Conventional440008New South Wales CSG1,141000196Total Eastern Australia4,43329242,748838Western Australia and Northern TerritoryCarnarvon8

66、031990165Bonaparte23301170157Amadeus12382030Total Western Australia and Northern Territory1,1592722701252Asia PacificPapua New Guinea1,2280250235Indonesia13110023Vietnam and Bangladesh8140016Total Asia Pacific1,36715250274Total 6,95971713,4491,364The information in this reserves statement has been c

67、ompiled by Greg horton,a full-time employee of the company.Greg horton is qualified in accordance 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 an

68、d guidelines set forth in the 2007 Petroleum Resources Management System(PRMS)approved by the Society of Petroleum Engineers(SPE).Unless otherwise stated,all references to reserves and resource quantities in this release are Santos net share.References to contingent resources are mid(2C)contingent r

69、esource estimates.Sales gas reserves and contingent resources are estimated after deducting the fuel,flare and vent necessary to produce and deliver sales gas.Santos engages independent experts Gaffney,Cline&Associates,Netherland,Sewell&Associates,Inc.and DeGolyer and MacNaughton to audit and/or eva

70、luate reserves and contingent resources.The auditors found that,based on the outcomes of each of the respective audits and evaluations,and their understanding of the estimation processes employed by Santos,that Santos 31 December 2011 reserves and contingent resources quantities in aggregate compare

71、 reasonably to those estimates prepared by the auditors.In addition,based on incorporating the results from the other auditors,without independent validation of their results and Santos own estimates for unaudited properties,Gaffney,Cline&Associates found that,in the aggregate,the total volumes summ

72、arised in the Santos summary table represents a reasonable estimate of Santos 31 December 2011 reserves and contingent resources position.PROVEN PLUS PROBABLE RESERVES(SANTOS ShARE)BY ACTIVITYSales gas PJCrude oil mmbblCondensate mmbblLPG 000 tonnesTotal mmboeReserves year end 20107,48966703,0831,44

73、5Production-207-7-3-210-47Additions3699457682Acquisitions/divestments-692310-116Estimated reserves year end 20116,95971723,4491,364Moomba gas plant,Cooper Basin,South Australia.10saNTOs ANNUAL report 2011review by Chief Financial OfficerAndrew SeatonSantos produced strong financial results in 2011,a

74、nd has a robust balance sheet to fund its growth projects,with$7.5 billion of available funding capacity.STRONG 2011 fINANCIAL RESULTSSantos performed well in 2011,with net profit after tax(NPAT)up 51%to$753 million.After adjusting for a number of items,including$408 million from assets sales and as

75、set impairments of$102 million,the underlying NPAT of$453 million was up 20%on the previous year.Sales revenue increased by 14%,reflecting higher realised prices across all products offset by a stronger Australian dollar.Over 30%of this revenue was attributable to oil sales,including first productio

76、n from the Chim So oil project in October 2011.Cash production costs have been held essentially flat over the past four years.This is a good result against an industry backdrop of escalating costs,and reflects managements commitment to control costs across the business.Operating cash flow of$1,253 m

77、illion was in line with 2010 as the impact of higher commodity prices was offset by higher taxes paid.Clearly,this reliable cashflow is important for our overall funding mix as we continue to fund our growth portfolio.The companys capital expenditure in 2011 was$3.1 billion.We expect capital expendi

78、ture of approximately$3.75 billion in 2012,including$2.5 billion on the PNG LNG and GLNG projects.KEY DRIVERS Of 2011 NPAT VERSUS 2010(as shown in the chart on page 11)Prices and foreign exchange increased NPAT by$216 million,driven by higher commodity prices offset by the stronger Australian dollar

79、.The average realised oil price in 2011 of$115 per barrel was 32%higher than 2010 and the average realised gas price of$4.71 per gigajoule was up 9%.Sales volumes decreased NPAT by$43 million,primarily due to lower gas volumes partially offset by higher crude oil sales.The effective tax rate decreas

80、ed NPAT by$40 million,primarily due to higher non-deductible overseas expenses.Production costs decreased NPAT by$16 million,primarily due to one-off flood recovery costs in the Cooper Basin and the commencement of production from Chim So.Depreciation,depletion and amortisation expenses decreased NP

81、AT by$40 million,reflecting higher unit development costs.Exploration and evaluation expense decreased NPAT by$29 million,due to a higher level of activity,including seismic surveys and drilling.Net finance income increased NPAT by$56 million,resulting from higher cash balances and the capitalisatio

82、n of interest to development projects.Gain on sale and impairment increased NPAT by$215 million,primarily due to the sell-down of a 15%interest in GLNG to Total and KOGAS,the sale of the Evans Shoal gas field and lower net impairment charges.Other costs decreased NPAT by$66 million,primarily due to

83、one-off tax adjustments.TAXATION Santos total taxation expense in 2011 was$531 million.After refunds,we made total tax payments of$605 million in 2011,including$157 million in royalty-related taxes,such as the Petroleum Resource Rent Tax(PRRT)which applies to petroleum projects that are located offs

84、hore Australia.saNTOs ANNUAL report 2011112010 NPAT2011 NPATPrices and foreign exchangeNET PROFIT AFTER TAX$million0200400600800500216(43)(40)(16)(40)56215(66)753Sales volumesEffective tax rateProduction costsDepreciation,depletion and amortisationExploration and evaluationNet finance incomeGain on

85、sale and impairmentOther costs(29)Undrawn project facility(PNG LNG)Undrawn corporatefacilitiesCashUndrawn ECA facilitiesAVAILABLE FUNDING CAPACITY024683.31,4451.1$billion1.91.2During 2011,the Federal Government introduced legislation to parliament to extend the PRRT to onshore Australian oil and gas

86、 projects.As at February 2012,the legislation had not been passed by the Senate,and therefore the impact is uncertain.However,if this legislation is passed and enacted in its current form,Santos expectation is that it will not result in any significant additional payments of PRRT.STRONG fINANCIAL PO

87、SITIONSantos strong balance sheet and liquidity position provides the capacity to fund the execution of the companys strategy,while minimising refinancing risk.Our senior long-term credit rating of BBB+has continued to be affirmed by Standard&Poors.At year end 2011,Santos had$3.3 billion in cash and

88、$4.2 billion in committed but undrawn debt facilities,resulting in a funding capacity of$7.5 billion.During 2011,we successfully secured US$1.2 billion in Export Credit Agency(ECA)supported debt facilities.The ECA facilities,with an average maturity of eight years,provide Santos with a flexible draw

89、down profile during the construction period of the GLNG project.The ECA facilities demonstrate the companys ability to raise capital from a diverse range of sources on attractive terms.Maturities on drawn debt facilities are minimal out to 2017,at which time Santos has the option to redeem the 1 bil

90、lion hybrid notes that otherwise mature in 2070.RESERVES AND RESOURCESSantos continued its strong track record of reserves replacement and resource conversion in 2011.Successful appraisal activity and the sanctioning of the Fletcher Finucane project added 82 mmboe of 2P reserves.These reserves addit

91、ions represent an organic 2P reserves replacement ratio of 173%when compared to our 2011 production of 47.2 mmboe.Net acquisitions and divestments during 2011 reduced 2P reserves by 116 mmboe.This reflects additions to reserves from the acquisition of Eastern Star Gas,offset by the sale of a 15%inte

92、rest in the GLNG project to Total and KOGAS and the completion of the transfer of GLNG reserves to our partners as part of the previously announced sell-downs.Santos offices12saNTOs ANNUAL report 201145986712103111317191821201416122215BishkekGunnedahAdelaideGladstoneRomaBrisbaneSydneyPerthPort Mores

93、byJakartaHanoiDhakaNew DelhiSingaporePort BonythonPatricia-BaleenWickham PointExplorationDevelopmentOperations/productionProcessing and load-out facilityDetailed exploration maps are available on the Santos website .Percentage interests are provided in the Santos Group interests section of this Annu

94、al Report.world of SantosREf LOCATIONSITE/ASSETACTIVITY SANTOS OPERATEDPRODUCTAUStrALIA1Carnarvon BasinMutineer-ExeterYesOilThevenard,Stag,Barrow IslandNoOilSpar,John Brookes,Varanus Island,Reindeer,Devil CreekNoGas,liquidsFletcher FinucaneYesOilZola,Winchester,Beam,Hoss4 of 9 permitsOil,gas2Browse

95、BasinCrown,BurnsideYesGas3Bonaparte BasinCaldita BarossaNoGasOther gas assetsYesGas4Amadeus BasinMereenieYesOil,gas5Cooper/Eromanga BasinsSouth Australia Moomba YesOil,gas,liquidsSouth-west Queensland Ballera,Jackson YesOil,gas,liquidsOther oil assets NoOil6Surat/Bowen BasinsDenison,Mahalo YesGasMoo

96、nieYesOilOther gas assetsNoGas7Gunnedah BasinPEL 238(Narrabri)YesGas8Gippsland BasinKipperNoGas,liquidsSoleYesGas9Otway BasinCasino,Henry,NetherbyYesGas,liquidsMinervaNoGasLNG projectS10Bonaparte BasinBonaparte LNGNoLNG11Timor Sea and GapBayu-Undan,Darwin LNGNoLNG,liquids12Surat/Bowen BasinsGLNGYes*

97、LNG13Papua New GuineaPNG LNGNoLNG,liquidsASIA14Papua New GuineaSE GobeNoOilHides,BarikewaNoOil,gas,liquids 15Papuan Basin,IndonesiaWarimNoOil,gas,liquids16East Java Basin,IndonesiaMaleo,Oyong,Wortel,Peluang YesOil,gas,liquids 17South Sumatra,IndonesiaOgan Komering I and IINoGas 18Nam Con Son Basin,V

98、ietnamChim SoNoOil,gas Dua,Chim So north-westNoOil,gas Block 13/03YesOil,gas 19Phu Khanh Basin,Vietnam123 PSCYesOil,gas,liquids 20Bengal Basin,BangladeshSangu/Block 16 YesGas,liquids 21North East Coast Basin,IndiaYesGas 22Fergana Basin,Kyrgyz RepublicNoOil,gas*Santos operates the upstream and has a

99、30%interest in the jointly held project company that operates the downstream.Santos holds a majority interest in companies that operate these permits.Santos is a leading gas producer in Australia,and has a strong,50-year track record of safe and sustainable operations.Demand for Australian gas,both

100、domestic and for export as LNG,is expected to quadruple by 2025,with gas prices trending towards oil-linked international parity.With assets in every major hydrocarbon province in Australia,Santos is well placed to help meet this increasing demand and support a lower-carbon future underpinned by the

101、 wider use of cleaner burning natural gas.wESTERN AUSTRALIA Santos is continuing to build its already significant business in Western Australia,from which oil,gas and condensate account for 24%of Santos total production.The Reindeer/Devil Creek and Spar(Halyard well)projects were delivered in 2011,o

102、n schedule and on budget.These projects are important additions to the states domestic gas supply,with the Devil Creek gas plant also representing greater energy security for Western Australia.Four gas sale contracts for Reindeer gas have been signed with major local companies in the mining industry

103、.Santos has an exciting program planned in 2012,with three operated rigs scheduled to drill wells in the Carnarvon and Browse Basins,offshore Western Australia.SANCTION Of fLETChER fINUCANESantos sanctioned the Fletcher Finucane oil project in January 2012,which will be developed through a tie-back

104、to the existing Santos operated floating production,storage and offloading facility at Mutineer-Exeter in the Carnarvon Basin.Fletcher Finucane is scheduled to begin production in the second half of 2013,extending the economic life of Mutineer-Exeter and allowing the joint venture partners to examin

105、e other opportunities near the existing facilities.Santos holds a 48%effective interest in the Fletcher Finucane project and is the operator.NORThERN TERRITORYOffshore northern Australia,Santos completed the sale of its entire working interest in the Evans Shoal field to Eni,for up to US$350 million

106、.The sale is consistent with Santos ongoing program to monetise non-core assets and actively manage its portfolio to maximise shareholders value.COOPER CONVENTIONAL GAS GROwThThe Cooper Basin has been the heartland of Santos operations for over 40 years,with its natural gas safely fuelling industry

107、and homes in eastern Australia since 1969.In 2011,total production from the Cooper Basin was slightly higher than 2010 and all customer deliveries were met despite adverse weather.Through a combination of successful results from the infill drilling program and improved base performance,Santos share

108、of Cooper Basin 2P reserves increased by 30%in 2011 to over 1,100 PJ.building the baseAustralia14saNTOs ANNUAL report 2011200920102011AUSTRALIA SALES REVENUE$1,805 million05001,0001,5002,0001,5701,5771,805AUSTRALIA CONTRIBUTION TO TOTAL 2011 PRODUCTIONAustralian crude oil 13%Australian condensate 3%

109、Australian LPG 2%Other Santos 29%Australian sales gas 53%200920102011AUSTRALIA PRODUCTION33.8 mmboe01020304039.434.033.8Production in line with 2010,with higher oil production offset by lower gas production.Sales revenue up 14%,with higher oil and gas prices offsetting lower sales volumes.Infill dri

110、lling involves drilling new wells at closer spacing to improve gas recovery,and will enable Santos to unlock significant further conventional gas resources.Santos has also been applying North American technology to lower costs and improve gas recovery,and a fleet of three new state-of-the-art drilli

111、ng rigs commenced operations in the Cooper Basin during the year.COOPER BASIN ShALE AND OThER UNCONVENTIONAL GASSantos has been a leader in unconventional resources exploration in the Cooper Basin since 2008,when it booked Australias first independently certified shale contingent resource.Santos dri

112、lled its first dedicated vertical shale well in 2011.Well stimulation activities in March 2012 will go a long way towards improving the technical understanding of this vast resource.As the operator of the Cooper Basin joint venture,Santos has access to the critical infrastructure,processing,gatherin

113、g systems,transport and storage that will allow the regions unconventional resources to be sold into the growing markets of eastern Australia.NSw CSG ACQUISITIONIn November 2011,Santos completed the acquisition of Eastern Star Gas Limited,along with the subsequent sale of a 20%working level interest

114、 in Eastern Stars permits in the Gunnedah Basin,New South Wales,to TRUenergy.This acquisition made Santos the largest holder of CSG reserves in New South Wales,and strengthened Santos integrated eastern Australian portfolio,which has the ability to supply into domestic and LNG export markets.Santos

115、is committed to continuing to work in partnership with local communities in New South Wales.We have already been working in regional NSW for over three years,employing and supporting local people and businesses.Good reason to ride Santos is a proud partner of the multi-award winning Santos Tour Down

116、 Under,Australias biggest free sporting event.In the past three years,more than 1,200 employees have volunteered for Santos booths,ridden in the Bupa Challenge Tours,and raised over$100,000 for Cancer Council SAs Ride for a Reason initiative.The 2011 race contributed$43.4 million to the SA economy a

117、nd attracted record crowds of 782,000 people.Santos partnership with the Santos Tour Down Under will run to 2016.Above:Santos employees recuperating after the Bupa Challenge Tour.Left:Field Engineer Paul Michell and Oil Team Leader Tom Thurgood near Tirrawarra in the Cooper Basin,South Australia.Wit

118、h Asian demand for LNG set to nearly double by 2025,Santos is uniquely placed to deliver its transformational LNG portfolio.Santos has interests in four LNG projects:the cornerstone GLNG project,the developing PNG LNG project,the producing Darwin LNG project and the proposed Bonaparte LNG project.SA

119、NTOS GLNG PROJECTSanctioned in January 2011,the GLNG project is progressing well,with first LNG exports expected in 2015.GLNG is a joint venture between Santos(upstream operator and 30%equity holder),PETRONAS of Malaysia,Total of France and KOGAS of South Korea.GLNG has binding LNG sales agreements

120、with KOGAS and PETRONAS,two of the worlds largest LNG companies,for 7 million tonnes per annum(mtpa).The US$16 billion project involves the development of CSG resources in the Bowen and Surat Basins in Queensland,construction of a 420-kilometre pipeline from the gas fields to Gladstone and construct

121、ion of a 7.8 mtpa,two-train LNG plant located on Curtis Island,Gladstone.As part of the upstream development,the project has secured over 520 landholder agreements and has obtained all cultural heritage clearances.In 2011,125 wells were drilled.This was slightly below expectation due to wet weather.

122、Gas is currently being produced to meet domestic contract nominations,with the remaining gas being injected into storage.Over 150 kilometres of the gas transmission pipeline has been fabricated,with the project receiving the second delivery of pipe in Gladstone in early 2012.Construction is continui

123、ng at the LNG plant site,with the laying of the foundation of the LNG train compressor underway in early 2012.In 2011,the project announced two major Queensland CSG research and training initiatives,which will increase the knowledge and skills base of the growing CSG industry.The projects workforce

124、of 1,800 will be increased significantly in 2012.PNG LNGSantos has a 13.5%interest in the 6.6 mtpa,two-train LNG project,which is operated by ExxonMobil.The integrated project includes the development of gas and condensate resources in the Southern Highlands and Western Provinces of PNG,construction

125、 of gas production,processing,liquefaction and storage facilities near Port Moresby and construction of over 7,000 kilometres of pipeline.16saNTOs ANNUAL report 2011transformingthrough LNGLNG projects200920102011LNG PROJECTS PRODUCTION5.9 mmboe02468108.18.05.9Production down 26%,primarily due to the

126、 sell-down of a 15%interest in the GLNG project to Total and KOGAS.200920102011LNG PROJECTS SALES REVENUE*$495 million0100200300400500445482495Sales revenue up 3%,with higher Darwin LNG revenue due to higher liquids prices offset by lower GLNG sales volumes.LNG PROJECTS CONTRIBUTION TO TOTAL 2011 PR

127、ODUCTIONOther Santos 87%LNG projects 13%*Chart includes all LNG,condensate and LPG revenue from Darwin LNG and domestic gas revenue from the under-construction GLNG project.Chart includes all LNG,condensate and LPG production from Darwin LNG and domestic gas production from the under-construction GL

128、NG project.Development drilling in the Hides and Angore fields from 2012 to 2014 will provide better understanding of the potential for project expansion.Construction on the US$15.7 billion project has been progressing well,with first LNG exports on target for 2014.Earthworks and construction activi

129、ties at the Hides plant site and Komo airfield are underway and the offshore pipelay has commenced.DARwIN LNGSantos has an 11.5%stake in Darwin LNG the companys first producing LNG asset.Operated by ConocoPhillips,the 3.6 mtpa project has been selling LNG to Asian customers since 2006.Gas is process

130、ed from the offshore Bayu-Undan fields located 500 kilometres north-west of Darwin in the Timor Gap.The project has expansion potential through the processing of third-party gas and an ongoing drilling campaign.In 2012,there will be a planned 35-day shutdown for regulatory and inspection checks,and

131、to conduct maintenance work to improve operational efficiency.BONAPARTE LNGBonaparte LNG is a proposed floating LNG project in the Bonaparte Basin,offshore northern Australia,which will involve the development of the Petrel,Tern and Frigate gas fields.Santos has a 40%interest in the innovative proje

132、ct,while GDF SUEZ,one of the worlds leading LNG companies,holds the remaining stake and is the operator.GDF SUEZ will cover Santos costs until a final investment decision is made.Bonaparte LNG is in the pre-front end engineering and design phase,with 150 people working on the project.The final inves

133、tment decision is scheduled for 2014,with first LNG production expected in 2018.Above:Landholders Ree and Leon Price with President Santos GLNG Mark Macfarlane(centre)drinking treated CSG water at Mount Hope Station.Left:Santos GLNG Team Leader Land and Resources,Andrew Snars,with pivot irrigation a

134、t Mt Hope Station,Queensland.Leading the way in water management Water management continues to be an a focus across Santos,with the launch of an Australia-first online water portal in 2011,which shows results from more than 100 monitoring locations.Located at .au,users can view information on surfac

135、e and subsurface water quality,test results for aquifers,and water bore levels.GLNG also launched the Mount Hope Station Irrigation Pilot Project,which provides a state-of-the-art pilot irrigation system to landholders that uses treated water from coal seams to irrigate high protein forage crops.18s

136、aNTOs ANNUAL report 2011delivering new growthAsiaSales revenue up 36%,due to oil sales from the Chim So project,which started production in October 2011.Santos has an exploration-led,focused Asian portfolio with operations in six countries.Over the past 12 months,producing assets performed well and

137、the Chim So and Wortel projects were delivered.Santos also opened an office in Singapore,which will focus on the management and development of Santos Asia Pacific business.ChIM SO DELIVEREDVietnam has been an important part of Santos Asian growth strategy since 2006,when the company entered the offs

138、hore Block 12W in the Nam Con Son Basin.In October 2011,Santos first Vietnam oil project,Chim So was delivered on schedule and under the sanctioned budget.Santos has a 31.9%interest in Chim So,which is situated in Block 12W and was sanctioned in 2009.Oil is currently produced from six wells,with the

139、 gross production rate expected to plateau at about 25,000 barrels of oil per day.Gas is also produced at a gross plateau production rate of 25 million cubic feet per day.This gas will be sent to existing gas infrastructure via a subsea pipeline,and will be used for domestic power generation.In 2012

140、,Santos will drill the Chim So NW-1 well,which has the potential to add significant resources to the project.Santos will also work with its partners to plan the development concept for the discovered gas resource of Dua,also located in Block 12W.VIETNAM GROwTh OPPORTUNITIES Also in Vietnam,Santos ha

141、s a 50%equity interest in Block 123 in the Phu Khanh Basin and drilled its first exploration well in 2011,which was a non-commercial discovery.Santos and its partners plan to conduct a 3D seismic program in 2012 to evaluate the remaining prospects in Block 123.Santos further expanded its Vietnam acr

142、eage in December 2011,when it signed a Production Sharing Contract(PSC)with Petrovietnam for Block 13/03,located in the Nam Con Son Basin.Under this PSC,Santos will operate the block and hold a 65%participating interest.wORTEL ONLINEThe Wortel gas development was delivered on budget in January 2012,

143、and is Santos third producing asset in Indonesia after Maleo and Oyong.200920102011ASIA SALES REVENUE$230 million050100150200250166169230saNTOs ANNUAL report 201118ASIA CONTRIBUTION TO TOTAL 2011 PRODUCTIONOther Santos 84%Asia 16%200920102011ASIA PRODUCTION7.5 mmboe024686.97.97.5Production down 5%,w

144、ith lower Indonesian gas production offset by Chim So oil production.saNTOs ANNUAL report 201119Above:Santos funded the drilling of a new freshwater well for local communities in Chittagong,Bangladesh.Below:The Grati plant,which processes gas from the Wortel and Oyong gas fields in Indonesia.Located

145、 in the Sampang PSC offshore East Java,Wortel is a tie-in to Santos existing facilities at Oyong.Gross gas production from both fields is expected to be 85 million cubic feet per day.INDONESIA:EXCITING OPPORTUNITIESSantos continues to grow its asset portfolio in Indonesia,which remains a core part o

146、f the companys business,accounting for 13%of total production in 2011.Santos base Indonesian assets,Maleo and Oyong,continued to produce strongly in 2011,and Santos signed an agreement to increase the Maleo gas price to US$5 per mmbtu,with escalation from June 2011.In August 2011,Santos signed a far

147、m-in agreement into two CSG(known in Indonesia as coal bed methane or CBM)licences in South Sumatra.This farm-in agreement with Indonesias Sugico will allow Santos to leverage its CSG experience in Australia and its operating experience in Indonesia,with Santos to begin drilling in 2012.Santos is al

148、so seeking to sanction the Peluang project in late 2012,which is a tie-back to Santos existing Maleo platform and which has begun front-end engineering design.If sanctioned,gas production would be expected to commence in late 2013.BANGLADESh DRILLING In late 2011,Santos commenced a three-well drilli

149、ng campaign in Block 16,in the Bengal Basin offshore Bangladesh.This exploration program is targeting short to long-term gas production,which would add to Santos existing production which supplies the growing Bangladesh domestic gas market.CENTRAL ASIA EXPLORATION Santos continues to hold interests

150、in exploration permits in the Fergana Basin,located in Central Asia.In 2007,Santos acquired an option to acquire an interest in Somon Oil,which holds two exploration licences in Tajikistan.A 2D seismic survey is currently underway on the Tajikistan licence areas and initial results are encouraging.s

151、upporting local communities As part of its ongoing commitment to communities in Bangladesh,Santos is supporting the Chillumpur multi-purpose building in Chittagong,which provides education,health and vocational training facilities to disadvantaged and vulnerable local people of the Chillimpur Union.

152、During regular visits to the building to meet students,teachers and parents,it became clear that fresh water was a major local issue as the existing supply was causing health problems.Santos funded the drilling of a new well in October 2011,which now provides the local community with clean water.SAN

153、22229-Draft5-d5c-2012.03.06Santos strives for the highest safety standards and achieved an equal best safety performance in 2011.We are committed to the prevention of spills.When incidents have occurred we have instigated comprehensive investigations and adopted corrective measures.20092008200720102

154、011SAFETY PERFORMANCE3.302463.65.85.33.33.3TRCFR 20092008200720102011020040060010.2199.6514.918.765.9OIL SPILL VOLUMES FROM OPERATED ASSESTS(GROSS)65.9m320082007200809200910201011AustraliaAsia0246GREENHOUSE GAS EMISSIONS FROM OPERATED ASSETS(GROSS)3.6 mtCO2e4.44.33.53.73.6operating responsiblysustai

155、nability20Energy efficiency projects completed,or in the process of implementation,will save 4.8 PJ per year.SPONSORSHIP BY REGIONQueensland 43%South Australia 48%Indonesia 3%Western Australia 3%Other 3%Santos continues to invest in partnerships in the communities in which we operate,supporting a br

156、oad range of meaningful programs.Santos values diversity and creates an environment in which everyone is empowered to succeed.Santos supports mutually beneficial partnerships that enrich and are valued by the communities in which we operate.20saNTOs ANNUAL report 2011saNTOs ANNUAL report 2011WORKFOR

157、CE GENDER PROFILE MaleFemale%Non-executive DirectorsSenior ExecutivesOtherTotal1417252586837575SPONSORSHIP BY TYPEEducation and youth 25%Community 39%Arts and culture 10%Health 10%Environment 8%Indigenous 7%Industry and government 1%saNTOs ANNUAL report 201121Applying the principles of sustainabilit

158、y improves Santos efficiency and profitability as it strives for a leadership position in the Australian and Asian energy markets.INTEGRATED APPROAChBy evaluating criteria beyond traditional economic measures,Santos can assess the full impact of its activities and make better business decisions.For

159、Santos,sustainability means making economic progress,protecting the environment and being socially responsible all on a foundation of sound corporate governance.It is a way of doing business that improves outcomes for employees,shareholders,business partners and the communities in which we operate.N

160、ew developments require early engagement with stakeholders,and careful assessment and management of social and environmental impacts.Good relationships with local communities,governments and suppliers are critical to Santos success.We seek to build lasting relationships and positive legacy assets in

161、 the community.To achieve this,Santos has established a framework that provides a consistent approach to incorporating sustainability principles into Santos way of doing business.MEASURING PERfORMANCEThis framework provides a clear,pragmatic approach and includes a unique tool for measuring and driv

162、ing sustainability performance across 24 sustainability indicators,six for each of four categories:environment,community,our people and economic.In 2011,performance scores were maintained across most indicators and improved performance was achieved for two key indicators:water resources and safety.T

163、hese improvements were achieved as a result of improved performance and delivery of innovative programs,such as beneficial water re-use in Queensland.Santos Vice President Technical&Engineering,Diana Hoff,with Graduate Geologist Emma Hissey,in the core laboratory in Santos Place,Adelaide.sustainabil

164、ity Report 2011For further information please refer to Santos Sustainability Report 2011,which details Santos management approach and sustainability performance during 2011.It also identifies Santos key stakeholders and addresses their concerns,and includes a dedicated section on coal seam ANNUAL re

165、port 2011board of directorsGREGORY JOhN wALTON MARTINBEc,LLB,FAIM,MAICDAge 52.Independent non-executive Director since 29 October 2009.Chairman of the People and Remuneration Committee of the Board and member of the Environment,Health,Safety and Sustainability Committee of the Board.Managing Directo

166、r of Murchison Metals Limited(appointed July 2011).Non-executive director of a number of listed and unlisted companies,including Energy Developments Limited(May 2006)and the Australian Energy Market Operator Limited(July 2009).Previous Deputy Chairman of the Australian Gas Association and inaugural

167、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 and Chief Executive Officer of AGL,and Chief Executive Infrastructure at Challenger Financi

168、al Services Group.KENNETh ALfRED DEANBCom(Hons),FCPA,FAICDAge 59.Independent non-executive Director since 23 February 2005.Chairman of the Audit Committee and member of the Finance Committee of the Board.Director of Santos Finance Ltd since 30 September 2005.Non-executive director of BlueScope Steel

169、 Limited since April 2009 and Chairman of BlueScopes Audit and Risk Committee.Chief Financial Officer of Alumina Limited from October 2005 to February 2009,alternate director of Alumina Limited from October 2005 to February 2009,and non-executive director of Alcoa of Australia Ltd,Alcoa World Alumin

170、a LLC and related companies from October 2005 to February 2009.Director of Shell Australia Ltd from 1997 to 2001 and Woodside Petroleum Ltd from 1998 to 2004.Over 30 years of experience in the oil and gas industry.Fellow of the Australian Society of Certified Practising Accountants and Fellow of the

171、 Australian Institute of Company Directors.Former Chief Executive Officer of Shell Financial Services and member of the La Trobe University Council.RIChARD MIChAEL hARDINGMScAge 62.Independent non-executive Director since 1 March 2004.Chairman of the Environment,Health,Safety and Sustainability Comm

172、ittee of the Board.Member of the Audit and Nomination Committees of the Board.Chairman of Downer EDI Limited since November 2010,having previously been appointed a non-executive director in July 2008 and Deputy Chairman on 1 July 2010.Independent non-executive Chairman of Clough Limited from May 200

173、6 to October 2010.Non-executive Deputy Chairman of Arc Energy Ltd until May 2007(appointed as non-executive director in August 2003).Chairman of the Ministry of Defence Project Governance Board Land Systems Division(Army)from 2003 to February 2009.Former President and General Manager of BP Developme

174、nts Australia Ltd with over 25 years of international experience with BP.Former Vice-Chairman and Council member of the Australian Petroleum Production and Exploration Association(APPEA).DAVID JOhN wISSLER KNOXBSc(Hons)Mech Eng,MBA,FIEAustAge 54.Appointed Chief Executive Officer and Managing Directo

175、r in July 2008.Member of the Environment,Health,Safety and Sustainability Committee of the Board.Director of Santos Finance Ltd since 24 April 2008.29 years of experience in the global oil and gas industry,including as Managing Director of BP Developments in Australasia from 2003 to 2007.Previously

176、held senior positions with BP in Australia,the United Kingdom and Pakistan,and management and engineering roles at ARCO and Shell in the United States,the Netherlands,the United Kingdom and Norway.Chairman of the Australian Petroleum Production and Exploration Association(APPEA).Director of the Boar

177、d of the Botanic Gardens and State Herbarium in South Australia.Council Member of the Business Council of Australia and Royal Institute of Australia,Member of the Advisory Board of University College London School of Energy and Resources(Aust),and a Fellow of the Institution of Engineers Australia.J

178、ANE ShARMAN hEMSTRITChBSc(Hons),FCA,FAICDAge 58.Independent non-executive Director since 16 February 2010.Member of the People and Remuneration Committee of the Board and the Audit Committee of the Board.Broad experience in the oil and gas,telecommunications,government,financial services and manufac

179、turing sectors.Spent 25 years with Accenture and Andersen Consulting.Formerly Accentures Managing Director Resources Operating Group Asia Pacific and,before that,Country Managing Director Australia.Non-executive director of the Commonwealth Bank of Australia(October 2006),Lend Lease Group(September

180、2011),Tabcorp Holdings Ltd(November 2008),Victorian Opera Company Ltd(October 2010)and Deputy Chairman of The Global Foundation(November 2009).A member of the Research and Policy Council of the Committee for Economic Development of Australia and the Council of the National Library of Australia.A Fel

181、low of the Institute of Chartered Accountants in Australia and in England and Wales,a Fellow of the Australian Institute of Company Directors and a member of Chief Executive Women Inc.PETER ROLAND COATES AOBSc(Mining Engineering)Age 66.Appointed Santos Chairman on 9 December 2009.Previously an indep

182、endent non-executive Director since 18 March 2008.Chairman of the Nomination Committee of the Board and a member of the People and Remuneration and Finance Committees of the Board.Chairman of Santos Finance Ltd since 1 January 2010.Non-executive director of Amalgamated Holdings Limited since July 20

183、09.Non-executive director of Glencore International plc since April 2011.Former non-executive Chairman of Xstrata Australia Pty Limited(from January 2008 to August 2009),and former Chairman and non-executive director of Minara Resources Limited(from April 2008 to April 2011).Previously Chief Executi

184、ve of Xstrata 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 June 2009 and was awarded the 2010 Australasian Institute of Mining and Metallurgy Medal.R

185、OY ALEXANDER fRANKLIN OBEBSc(Hons)Age 58.Independent non-executive Director since 28 September 2006 and member of the Environment,Health,Safety and Sustainability and People and Remuneration Committees of the Board.Non-executive director of Keller Group plc since July 2007 and Chairman since August

186、2009.Non-executive director of StatoilHydro ASA since October 2007,Boart Longyear Limited since October 2010 and non-executive director of Cuadrilla Resources Holdings Limited since January 2012.Former Chief Executive Officer of Paladin Resources plc from 1997 to 2005 and former Group Managing Direc

187、tor of Clyde Petroleum plc.Former Chairman of BRINDEX,the trade association for UK independent oil and gas companies,from 2002 to 2005,and a former member of PILOT,the joint industry/UK Government Taskforce set up to maximise hydrocarbon recovery from the UK North Sea from 2002 to 2005.In 2004,award

188、ed the OBE for services to the UK oil and gas industry.KENNETh ChARLES BORDALLB,BAAge 59.Independent non-executive Director since 14 February 2007.Chairman of the Finance Committee of the Board and member of the Nomination Committee of the Board.Chairman of Leighton Contractors Pty Ltd since August

189、2011,having previously been a non-executive director since July 2007.Board member of Fullerton Funds Management,owned by Temasek,Singapore,since February 2007.Appointed a director of Talent2 International Ltd in August 2008 and to the Asian Advisory Board of Aviva Pte Ltd in Singapore in February 20

190、09.Previously a Board member of SFE Corporation for over five years until its acquisition by the Australian Stock Exchange Ltd in July 2006.Former non-executive director of Ithmaar Bank(Bahrain and Kuwait).CEO of Middle East and North Africa,Deutsche Bank before retirement in May 2007.Formerly Regio

191、nal CEO Asia Pacific and CEO Australia and New Zealand,Deutsche Bank.Director of Deutsche Bank Malaysia from 2002 until retirement in May 2007.24saNTOs ANNUAL report 2011Santos leadership teamJAMES BAULDERSTONEVice President Eastern AustraliaLLB(Hons),BSc(Hons)James Baulderstone is responsible for S

192、antos activities in South Australia,Victoria and New South Wales.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 January 2007 as General Counsel and C

193、ompany Secretary after previously holding similar roles at Mayne Group and BlueScope Steel.Prior to his current role,James was Santos Vice President Corporate and Commercial with responsibility for mergers and acquisitions,and commercial.James has extensive legal,commercial and business development

194、experience across many countries,including the United States,Germany,the United Kingdom,Malaysia,China and India.PETRINA COVENTRYChief Human Resources OfficerBEd,Grad Dip HR,Grad Dip Phil,Master Business EthicsPetrina Coventry is responsible for the companys organisation and people strategies.Petrin

195、a has previously 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 Melbourne Business School,a Vincent Fairfax

196、Fellow,a member of the World Economic Forum Partner Against Corruption Initiative(PACI)and an advisor to the Global Council of Corporate Universities(GlobalCCU).JOhN ANDERSONVice President Western Australia and Northern TerritoryLLB,BEc,GDCLJohn Anderson is responsible for Santos activities in Weste

197、rn 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 1996 as Corporate Counsel for the former Queensland Northern Territory Business Unit after

198、10 years as a solicitor with Freehills.He has held a range of roles at Santos,including Manager Legal and Business Services,Group Executive Business Development,Vice President Strategic Projects and,most recently,Vice President Commercial.TREVOR BROwNVice President Exploration and SubsurfaceBSc(Hons

199、)Trevor Brown is responsible for exploration and new ventures and for ensuring excellence in subsurface activities across Santos exploration,appraisal and development portfolio.Trevor is a geoscientist with 26 years of industry experience in Australia,Asia,the US and South America.He has been with S

200、antos for 10 years in roles including Manager New Ventures,Manager Growth Projects,and Vice President Geoscience and New Ventures.He previously held roles with Unocal,Vico and Woodside.Trevors career has included onshore and offshore operations with extensive drilling activities,deepwater exploratio

201、n and appraisal and new ventures.PETER CLEARYVice President Strategy and Corporate DevelopmentBCom,LLBPeter Cleary is responsible for Santos commercial,strategy and planning,corporate development,and public affairs functions.Peter has extensive global experience in the petroleum industry and joined

202、Santos from BP in September 2010.He was most recently 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 management positions in Australia,Indonesia,Korea,Hong Kong,Abu Dhabi and the United Kingdo

203、m.DAVID LIMCompany SecretaryBEc,LLB,Ch.SecDavid Lim is responsible for corporate governance,continuous disclosure and compliance with ASX and ASIC requirements,and provides the Santos Board with independent advice and support in relation to these matters.Prior to joining Santos in 2007,David had ove

204、r 15 years of experience in commercial legal practice.He is an accredited Chartered Secretary.Before his current role,David held the position of Deputy General Counsel and Assistant Company Secretary.DAVID KNOXChief Executive Officer and Managing DirectorBSc(Hons)Mech Eng,MBA,FIEAust David Knox join

205、ed Santos in September 2007 as Executive Vice President Growth Businesses and was appointed Acting Chief Executive Officer in March 2008 and Chief Executive Officer and Managing Director in July 2008.He has 30 years of experience in the global oil and gas industry,including as Managing Director for

206、BP Developments in Australasia from 2003 to 2007.He previously held senior positions with BP in Australia,the United Kingdom and Pakistan,and management and engineering roles at ARCO and Shell in the United States,the Netherlands,the United Kingdom and Norway.David holds a first-class honours degree

207、 in Mechanical Engineering from Edinburgh University and a Masters of Business Administration from the University of Strathclyde.DIANA hOffVice President Technical and EngineeringBSc Petroleum Engineering(Magna cum Laude)Diana Hoff is responsible for drilling and completions,projects,surface enginee

208、ring,safety and environment.She has 25 years of experience with major and independent operators in the upstream oil and gas industry.Diana joined Santos in 2010 as General Manager Drilling and Completions.She previously held positions with several oil and gas companies,including Chevron,Amoco and Qu

209、estar.Her career has included drilling and completions operations,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 di

210、sturbance.MARK MACfARLANEPresident Santos GLNGBEng(Hons)MechanicalMark Macfarlane is responsible for the delivery of the Santos GLNG Project in Queensland,including gas field infrastructure development,construction of a 420-kilometre gas transmission pipeline and the two-train 7.8 mtpa LNG plant on

211、Curtis Island near Gladstone.Before his current role,Mark held a number of leadership roles at Santos,including Vice President Eastern Australia and Vice President Development.Mark joined Santos in 1997,following a nine-year career with Esso in Australia and Malaysia.ChRISTIAN PAEChGeneral CounselLL

212、B(Hons),BComChristian Paech advises the Santos Board and management on legal matters affecting 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,statut

213、ory compliance,mergers and acquisitions,gas sales and production sharing contracts.Christian has broad experience in the petroleum industry 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 c

214、orporate governance.MARTYN EAMESVice President Asia PacificBSc(Hons)Martyn Eames is responsible for managing Santos activities in the Asia Pacific region.This includes management of Santos existing exploration,development and production assets in Indonesia,Papua New Guinea,Vietnam,India,Bangladesh a

215、nd Central Asia and any future growth.Martyn joined Santos in December 2004 as Vice President Corporate and People.Before then,he spent more than 25 years with BP,working in various upstream roles in Angola,Canada,Australia,Papua New Guinea,Norway,the United Kingdom and the United States.ANDREw SEAT

216、ONChief Financial OfficerBEng(Hons)Chemical,GradDip BusAdminAndrew Seaton was appointed Chief Financial Officer in 2010,and is responsible for Santos corporate finance,accounting,taxation,treasury,investor relations,risk,insurance,audit,information systems and procurement functions.Andrew has 25 yea

217、rs of experience in the global oil and gas industry,encompassing a broad range of finance,banking,commercial and engineering roles.Before joining Santos in 2005,Andrew held senior roles in investment banking with Merrill Lynch and corporate banking with National Australia Bank.His early career inclu

218、ded 10 years of engineering and project management experience,including LNG,refining and petrochemicals projects.Prior to being appointed Chief Financial Officer,Andrew held the position of General Manager,Commercial and Finance for Santos Eastern Australia Business Unit.26saNTOs ANNUAL report 2011c

219、orporate governanceINTRODUCTION The 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

220、 and business conduct across its operations in Australia and internationally.The Board has established corporate governance 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

221、on the Companys 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),and,in the opinion of the Board,comply with best practice,including the ASX Corporate Governance Councils Prin

222、ciples and Recommendations(ASX Principles).Consistent with the Guide to Reporting recommendations under the ASX Principles,this statement provides details of the corporate governance practices adopted by the Company.The table below indicates the sections of this Statement that address each of the su

223、bstantive recommendations under the ASX Principles.ASX RECOMMENDATION FOR FY2011HOW SANTOS SATISFIES THE RECOMMENDATION Principle 1 Lay solid foundations for management and oversightEstablish and disclose the functions reserved to the Board and those delegated to managementSection 2 discusses the di

224、vision of responsibilities between the Board and ManagementDisclose the process for evaluating the performance of senior executivesSection 2.1 details how senior executive performance is reviewedPrinciple 2 Structure the Board to add valueA majority of the Board should be independent DirectorsSectio

225、ns 1.1 and 1.2 confirm that the Board comprises seven independent Directors and one executive DirectorThe chairperson should be an independent DirectorSection 1.1 confirms this and explains how the composition of the Board is determined The roles of chairperson and chief executive officer should not

226、 be exercised by the same individualSection 1.2 confirms thisThe Board should establish a Nomination Committee consisting of a minimum of 3 members,the majority being independent directorsSections 3.1 to 3.3 set out the role and membership of the Board Committees,including the Nomination CommitteeDi

227、sclose the process for evaluating the performance of the Board,its committees and individual directorsSection 1.5 details how the performance of the Board and Directors is reviewedSection 3.1 confirms that the role,composition and performance of the Boards Committees is periodically reviewedPrincipl

228、e 3 Promote ethical and responsible decision-makingEstablish a code of conduct to guide the Directors,the CEO,the CFO and any other key executivesSection 5.2 provides details regarding the Santos Code of Conduct,which sets out the Companys key rules,values and guidelinesAdopt and disclose a diversit

229、y policy and set measurable objectives relating to gender diversity for disclosure in the Annual ReportThe Company has adopted a Group-wide diversity policy.Further details of the Companys diversity initiatives and measurable objectives are set out in Section 5.1Disclose the proportion of female emp

230、loyees in the organisation,in senior executive positions and on the Board in the Annual ReportSection 5.1 provides details of female representation levels across SantossaNTOs ANNUAL report 201127Principle 4 Safeguard integrity in financial reportingThe Board should establish an Audit Committee,and s

231、tructure the Committee so that it:consists only of non-executive Directors;consists of a majority of independent Directors;is chaired by an independent chair,who is not chair of the Board;and has at least three membersSections 3.1 to 3.3 set out the role and membership of the Board Committees,includ

232、ing the Audit Committee,and confirm compliance with the Audit Committee structureThe Audit Committee should have a formal charterThe Audit Committee operates under a Charter approved by the Board.For further details see Sections 3.1 and 3.3Principle 5 Make timely and balanced disclosure Establish an

233、d disclose written policies and procedures designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior management level for that complianceSection 5.4 outlines the written policies and processes Santos has adopted to ensure compliance with its

234、 continuous disclosure obligations Principle 6 Respect the rights of shareholders Design and disclose a communications strategy to promote effective communication with shareholders and encourage effective participation at general meetingsSection 5.4 summarises the Companys shareholder communication

235、policiesPrinciple 7 Recognise and manage risk Establish policies for the oversight and management of material business risks and disclose a summary of those policiesSections 4.1 to 4.3 summarise the Companys risk management systems,including reporting to the Board on risk,and provide examples of how

236、 business risks are managedRequire management to design and implement the risk management and internal control system to manage the companys material business risks and report to the Board on whether those risks are being managed effectivelySections 4.1 to 4.3 summarise the Companys risk management

237、systems,including reporting to the Board on risk,and provide examples of how business risks are managedDisclose whether the Board has received assurance from the CEO and the CFO that the declaration provided under s295A of the Act is founded on a sound system of risk management and internal control

238、that is operating effectively in all material respects in relation to financial reporting risksSection 4.2 confirms that the Board has received such assurance for the 2011 financial year Principle 8 Remunerate fairly and responsibly The Board should establish a remuneration committeeSections 3.1 to

239、3.3 set out the role and membership of the Board Committees,including the People and Remuneration CommitteeDistinguish the structure of non-executive Directors remuneration from that of executive Directors and senior executivesFurther information regarding the structure and details of the remunerati

240、on paid to Directors,the CEO and other senior executives is set out in the Remuneration Report on pages 59 to 74 of this Annual Report 28saNTOs ANNUAL report 2011PART 1:COMPOSITION Of ThE BOARD Relevant policies and charters See Board Guidelines Company ConstitutionThe composition of the Board is de

241、termined in accordance with the Companys Constitution and the Board Guidelines which,among other things,require that:the Board comprise a minimum of five directors(exclusive of the Chief Executive Officer(CEO)and Managing Director),and a maximum of ten directors;the Board should comprise a substanti

242、al majority of independent,non-executive Directors;there should be a separation of the roles of Chairman and CEO of the Company;the Chairman of the Board should be an independent,non-executive Director;and performance of the Board and its members should be reviewed regularly and objectively.1.1 DIRE

243、CTOR INDEPENDENCE The Board has adopted the definition of independence set out in the ASX Principles.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 relationsh

244、ip that could,or could reasonably be perceived to,materially interfere with the Directors ability 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

245、 assist in that assessment.Under these guidelines,the following interests are regarded as material 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 affiliati

246、on with an entity that accounts for 5%or more of the revenue or expense of the Company.Each Directors 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 judg

247、ement to Board decisions.In this context,Directors are required to provide a standing notice of 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.In add

248、ition to a standing Board agenda item for declarations of changes to Directors interests,Directors standing notices of interests were last refreshed in February 2012,tabled at the February 2012 Board meeting and copies distributed to all Directors.Taking into account each refreshed standing notice,t

249、he Board considers that all non-executive Directors are independent.Similarly,Directors must declare any conflict of interest that they may have at the start of all Board meetings.Where a material personal interest arises with respect to a matter that is to be considered by the Board,the Director is

250、 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.Currently,the Board comprises seven non-executive Directors,all of whom are considered independent under the principles set ou

251、t above,and 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,t

252、hese skills 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 background,skills and experience necessary to guide the Companys strategic growth p

253、lans.Corporate Governance(continued)saNTOs ANNUAL report 201129The current Board comprises eight Directors from diverse backgrounds with a range of business experience,skills and attributes.The following charts show the skills and experience of the current Directors across several dimensions that ar

254、e relevant to Santos as a leading energy company.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 Company Secretary can be found on pages 22 to 24 of the Annual Report.1.3 DIRECT

255、OR 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 have an appropriate mix of experience,skills and backgrounds to manage a leading energy company.The primar

256、y criterion adopted in selection of suitable Board candidates,and the assessment of incumbent Directors seeking re-election,is their capacity to contribute to the ongoing development of the Company,having regard to the location and nature of the Companys significant business interests and to the can

257、didates qualifications and experience by reference to the attributes of existing Board members.The Board Guidelines include the following principles:non-executive Directors are to be appointed on the basis that their nomination for re-election as a Director is subject to review and support by the Bo

258、ard;there should be appropriate circumstances justifying re-election after a specified period of service as a Director;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 out below.In making

259、recommendations relating to Board composition,the Nomination Committee takes into account both the current and future needs of the Company.EDUCATIONAL QUALIFICATIONSLegal/Humanities 12.5%Finance/Accountingand Legal/Humanities 12.5%Science/Engineering and Finance/Accounting 12.5%Finance/Accounting 12

260、.5%Science/Engineering 50%INDUSTRY EXPERIENCEResources,Professional Services and Finance 25%Finance 12.5%Finance and Professional Services 12.5%Resources 50%GEOGRAPHICAL EXPERIENCEOther 12.5%Australia and Other 37.5%Australia,Asia Pacific and Other 50%saNTOs sTRaTeGyDefine optimal combination of bac

261、kground,skills and experience of the BoardBoard performance review to assess current capabilitiesNomination Committee consideration of succession planningIdentify potential gaps and/or areas for developmentDevelopment and training to enhance Board effectivenessRecruitment of new Directors to complem

262、ent existing Board capabilitiesCurrent business plan and operationsFuture growth plans30saNTOs ANNUAL report 2011The Nomination Committee specifically considers each of the Directors coming up for re-election and makes an assessment as to whether to recommend their re-appointment to shareholders.Thi

263、s 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 for the Directors more broadly.Where a potential gap is identified in the backgrounds,ex

264、periences 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.While the Nomination Committee is responsible for defining the desired attributes and skill-sets for a new Director,th

265、e services of an independent consultant are 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 recommendations to the Board regarding possible appoint

266、ments 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,Board Guidelines,Committee Charters,relevant poli

267、cies,and functional overviews of the Companys strategic objectives and operations.Additionally,the expectations of the Board in respect to a proposed appointee to the Board,and the workings of the Board and its Committees,are conveyed in interviews with the Chairman.Induction procedures include acce

268、ss to appropriate executives in relation to details of the business of the Company.Directors are encouraged by the Board to continue their education by attending both internal and external training and education relevant to their role.During 2011,the Directors participated in briefing sessions on a

269、broad range of issues,including crude oil pricing,global LNG supply and the national Work Health and Safety Act 2011(Cth),and attended a site visit to GLNG,including engagement with local community,business and government leaders.1.5 REVIEW OF BOARD AND DIRECTOR PERFORMANCE Ordinarily,an external re

270、view of the Board and individual Directors is carried out on a biennial basis and internal reviews of individual Directors are conducted annually.The external reviews are carried out by an independent consultant,based on a scope agreed in advance with the Board.Internal reviews are facilitated by th

271、e Chairman,in consultation with the Nomination Committee,and involve formal interviews with each Director,culminating in a written report prepared by the Chairman.An external review of the Board as a whole commenced in December 2010,together with peer review of all individual Directors.This review c

272、ontinued into 2011,culminating in a report in February 2011,and 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

273、and conduct of the Board.As a result of recommendations arising from the external Board review,a number of initiatives were introduced in 2011 to ensure the continued effectiveness of the Boards performance and enable its sustained focus on key issues for the Company.These initiatives include:a five

274、-year strategic review;broadening the remit of the Remuneration Committee to include oversight of diversity,succession planning and talent development;and increasing the Boards engagement with the upcoming talent within the Company as well as the key external stakeholders in the Companys business.An

275、 internal review is being undertaken in February and March 2012,the results of which will be reported to the Board by the Chairman at the next Board meeting in May 2012.This review includes feedback from all Directors as well as feedback from Senior Executives on the workings of the Board as a whole

276、,and includes a review of the performance,structure,objectives and purpose of the Board Committees.Further details regarding this process and recent Board Committee reviews are provided in Section 3.1 below.PART 2:BOARD RESPONSIBILITIES Relevant policies and charters See Board GuidelinesIn addition

277、to the Board Guidelines,the Board has adopted a formal document outlining the Role of the Board.The overriding objective is to increase shareholder value to top quartile performance.The Board endeavours to do this by use of a management framework that protects the rights and interests of shareholder

278、s and ensures the Company is properly managed through the implementation of sound strategies and action plans and the development of an integrated framework of risk management and control over the Companys economic resources.2.1 RESPONSIBILITIES The Board is responsible for the overall corporate gov

279、ernance of the Company,including approving the strategic direction and financial objectives,oversight of the Company and its management,establishing goals for Management and monitoring the attainment of these goals.Corporate Governance(continued)saNTOs ANNUAL report 201131Specifically,the Board is r

280、esponsible for:the oversight of the Companys strategic direction and management of the Company;the approval of the annual capital and operating budget;the approval of delegations of authority to Management;significant acquisitions and disposals of assets;significant expenditure decisions outside of

281、the Board-approved corporate budget,including hedging of product sales,sales contracts and financing arrangements;the approval of,and monitoring of,financial performance against strategic plans and corporate budgets;the approval of the Companys financial reports;approving ethical standards and codes

282、 of conduct;the selection and evaluation of,and succession planning for,Directors,CEO and Company Secretary and general endorsement of the same for other Executives reporting to the CEO;the remuneration of Directors and the CEO and general endorsement of the same for other Executives reporting to th

283、e CEO;and oversight of the integrity of material business risk management,including financial and non-financial risks.Each Director is required to ensure that they are able to devote sufficient time to discharge their duties and to prepare for Board and Committee meetings and associated activities.T

284、he Board delegates management of the Companys resources to the Companys executive management team,under the leadership of the CEO,to deliver the strategic direction and goals approved by the Board.This is formally documented in the Companys Delegation of Authority,which details the responsibilities

285、delegated by the Board to Management for:the conduct and operation of the Companys business in the ordinary course;implementing corporate strategies;and operating under approved budgets and written delegations of authority.An important aspect of the Boards responsibilities is the evaluation of the C

286、ompanys executives.Performance evaluation of senior executives is undertaken twice a year by the CEO and the Chairman undertakes the CEOs review.The results of these reviews are used in determining future remuneration in consultation with the People and Remuneration Committee,and generally for revie

287、w by the Board in relation to Management succession planning.Performance reviews were conducted in accordance with this process for each of the Senior Executives,including the CEO,during the year.These reviews impacted on the short-term incentives for the Senior Executives and included the following

288、 criteria:analysing performance against agreed measures;examining the effectiveness and quality of the individual in their given role;assessing key contributions;identifying areas of potential improvement;and assessing whether expectations of shareholders and other stakeholders have been met.Details

289、 of the remuneration received by the CEO and Senior Executives,including short-and long-term incentives relating to Company and individual performance targets,are set out in the Remuneration Report commencing on page 59 of the Annual Report.Details of non-executive Director remuneration are also set

290、 out in the Remuneration Report.2.2 INDEMNITY,ACCESS TO INFORMATION AND INDEPENDENT PROFESSIONAL ADVICE The Board Guidelines set out the circumstances and procedures pursuant to which a Director may seek independent professional advice at the Companys expense.Those procedures require prior consultat

291、ion with,and approval by,the Chairman and assurances as to the qualifications and reasonableness of the fees of the relevant adviser.Pursuant to a deed executed by the Company and each Director,a Director also has the right to access all documents that have been presented to meetings of the Board or

292、 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 Director,or such longer period as is necessary to determine relevant legal proceedings that commenced during that term.Information in respe

293、ct of indemnity and insurance arrangements for Directors and certain senior executives appears in the Directors Report on page 75 of this Annual Report.PART 3:BOARD COMMITTEES Relevant policies and charters See Audit Committee Charter Environment,Health,Safety and Sustainability Committee Charter Fi

294、nance Committee Charter Nomination Committee Charter People and Remuneration Committee Charter3.1 ROLE AND MEMBERSHIP The Board has established a number of Committees to assist with the effective discharge of its duties.The membership and role of each Committee is set out in Section 3.3.32saNTOs ANN

295、UAL report 2011All Committees are chaired by and comprise only non-executive,independent Directors,except the Environment,Health,Safety and Sustainability Committee,which includes the CEO as a member in accordance with the Charter of that Committee.Other composition requirements specific to each Com

296、mittee are set out in Section 3.3.Non-Committee members may attend Committee meetings by invitation.Each Committee operates under a specific charter approved by the Board.Board Committees conduct their own internal review of their performance,structure,objectives and purpose from time to time.Review

297、s conducted in 2011 resulted in the following changes to Committee Charters:Following a review in 2011,a decision was made to expand the scope of the Remuneration Committee,which was renamed the People and Remuneration Committee.A more extensive Charter for that Committee was adopted in May 2011.Cha

298、nges to reflect diversity obligations had already been implemented in 2010.Changes to the Nomination Committee Charter to reflect its diversity obligations were approved in February 2011.Most recently,changes to the Charter of the Environment,Health,Safety and Sustainability Committee were reviewed

299、in December 2011 and adopted in February 2012.This updated the Charter in line with changes brought about by the new Work Health and 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 princi

300、ples endorsed by the Board.Board Committees have access to internal and external resources,including access to advice from independent external consultants or specialists.In 2011,the People and Remuneration,Nomination and Audit Committees took advice from independent external consultants without Man

301、agement present,in relation to the CEOs remuneration,non-executive Director remuneration,candidates for appointment to the Board and audit matters.The Chairman of each Committee provides an oral,and,where appropriate and practicable,a written report together with the minutes and recommendations of t

302、he Committee at the next Board meeting.Following is a summary of the membership of the Board Committees.Details of the qualifications and experience of each Director can be found on pages 22 to 23 of this Annual Report.Board Committees Audit Committee Environment,Health,Safety and Sustainability Com

303、mittee Finance Committee Nomination Committee People and Remuneration Committee KC Borda Non-executive Director Chairman Member PR CoatesNon-executive Director(Chairman)Member Chairman MemberKA Dean Non-executive Director Chairman Member RA Franklin1Non-executive Director Member MemberRM Harding1 No

304、n-executive Director Member Chairman Member JS Hemstritch Non-executive Director Member MemberDJW Knox Executive Director (CEO and Managing Director)Member GJW MartinNon-executive Director Member Chairman 1.Mr RM harding ceased to be a member of the People and Remuneration Committee,and Mr RA frankl

305、in was appointed as a member of the People and Remuneration Committee,on 17 february 2012.Corporate Governance(continued)saNTOs ANNUAL report 2011333.2 BOARD AND COMMITTEE MEETINGS The Board Guidelines prescribe that the Board is to meet at least eight times a year,including a strategy meeting.Board

306、 members are expected to attend any additional meetings as required.In 2011,a total of 10 meetings were held,including a strategy workshop and meeting.In addition to formal meetings,the Directors participated in a site visit to Gladstone in June 2011.Members of Management attend relevant parts of Bo

307、ard and Committee meetings,at which they report to Directors within their respective areas of responsibility.Where appropriate,advisers to the Company attend meetings of the Board and of its Committees.Board meetings regularly include a session at which the non-executive Directors meet without the C

308、EO and Managing Director,or other members of Management,present.Details of the Board and Committee meetings held and Directors attendances at those meetings appear in the Directors Statutory Report on page 50 of this Annual Report.The Company recognises the importance of building relationships betwe

309、en its Directors.The Board believes that events outside formal Board meetings help to foster collaboration and trust between the Directors.In accordance with the Board Guidelines,several Board dinners are held each year,of which at least one is attended exclusively by non-executive Directors.3.3 ROL

310、E AND MEMBERSHIP OF COMMITTEES Committee Members and composition Role Audit Mr KA Dean(Chairman)Mr RM Harding Ms JS Hemstritch The Committee is required to consist of:members who are financially literate;at least one member with past employment experience in finance and accounting,requisite professi

311、onal certification in accounting or other comparable experience or background;and at least one member with an understanding of the exploration and production industry.The Chairman of the Board is precluded from being the Chairman of the Audit Committee.The primary objective of the Audit Committee is

312、 to assist the Board to fulfil its corporate governance and oversight responsibilities related to financial accounting practices,external financial reporting,financial risk management and internal control,the internal and external audit function,and compliance with laws and regulations relating to t

313、hese areas of responsibility.The role of the Audit Committee includes:evaluating the truth and fairness of Company financial reports and recommending acceptance to the Board;reviewing the process adopted by the CEO and Chief Financial Officer(CFO)when certifying to the Board that the Companys financ

314、ial reports are true and fair and that they are based on a sound system of risk management and internal compliance and control that is operating effectively in all material respects;examining the accounting policies of the Company to determine whether they are appropriate and in accordance with gene

315、rally accepted practices;meeting regularly with the internal and external auditors to reinforce their respective independence and to determine the appropriateness of internal and external audit procedures;where the external auditor provides non-audit services,reporting to the Board as to whether the

316、 Committee is satisfied that the provision of those services has not compromised the auditors independence;reviewing the process of the Reporting Misconduct Programme;recommending proposed dividends to the Board for final adoption;and recommending to the Board the appointment and dismissal of the he

317、ad of internal audit.34saNTOs ANNUAL report 2011Committee Members and composition Role Finance Mr KC Borda(Chairman)Mr PR Coates Mr KA Dean The Finance Committee Charter requires that the Committee comprise at least three independent non-executive Directors,all of whom will be financially literate a

318、nd including at least one with past employment experience in finance,requisite professional certification or other comparable experience or background that results in the individuals financial sophistication.The role of the Finance Committee includes:responsibility for considering and making recomme

319、ndations to the Board on the Companys capital management strategy and the Companys funding requirements and specific funding proposals;formulating and monitoring compliance with treasury policies and practices;and the management of credit,liquidity and commodity market risks.Environment,Health,Safet

320、y and Sustainability Mr RM Harding(Chairman)Mr RA Franklin Mr GJW Martin Mr DJW Knox The Charter requires that this Committee comprise at least three non-executive Directors and the Managing Director.The role of the Environment,Health,Safety and Sustainability Committee includes:monitoring and revie

321、w of the Environment,Health and Safety and Sustainability Policies and related systems and their compliance with all applicable environment,health and safety legislation;monitoring and review of all aspects of environment,and health and safety risks that are relevant to the Companys operations;recei

322、pt and consideration of reports on all major changes to the Companys environment and health and safety responsibilities;receipt and consideration of reports on any significant system failure,accident or other incident;review of the regular internal and external environmental,health and safety audits

323、;and monitoring and review of the appropriateness and implementation of the Companys environment,health,safety and sustainability governance arrangements.Nomination Mr PR Coates(Chairman)Mr KC Borda Mr RM Harding As required by its Charter,the Nomination Committee consists of at least three independ

324、ent Directors and is chaired by the Chairman of the Board.It is the responsibility of the Nomination Committee to devise the criteria for,and review membership of,the Board including the re-election of incumbent Directors and nominations for new appointments,to maintain an appropriate balance of ski

325、lls,experience,diversity and expertise on the Board.When a Board vacancy exists or where it is considered that the Board would benefit from the services of a new Director with particular skills,experience or background,the Nomination Committee has responsibility for proposing candidates for consider

326、ation by the Board.Corporate Governance(continued)saNTOs ANNUAL report 201135Committee Members and composition Role People and Remuneration Mr GJW Martin(Chairman)Mr PR Coates Mr RA Franklin Ms JS Hemstritch The People and Remuneration Committee Charter requires that the Committee comprise at least

327、three non-executive Directors,including the Chairman of the Board.Mr RM Harding ceased to be a member,and Mr RA Franklin was appointed as a member of the People and Remuneration Committee,on 17 February 2012.The People and Remuneration Committee is responsible for reviewing the remuneration policies

328、 and practices of the Company,including:the compensation arrangements for the non-executive and executive Directors(including the CEO and Managing Director),and Senior Executives;development and succession plans for the CEO and Managing Director and the senior leadership team;the Companys superannua

329、tion arrangements;employee share and option plans;reviewing and reporting to the Board on measurable objectives for achieving gender diversity;an annual assessment of the gender diversity objectives and progress in achieving them;and reviewing and reporting on remuneration analysed by gender.The Com

330、mittee has access to,and regularly uses,independent advice and comparative studies on the appropriateness of remuneration arrangements.The People and Remuneration Committee recently reviewed the Companys processes for the engagement of external remuneration consultants and has made changes to ensure

331、 that these processes are consistent with new legislation regulating the provision of remuneration recommendations.The structure and details of the remuneration paid to Directors,the CEO and other Senior Executives during the period are set out in the Remuneration Report commencing on page 59 of thi

332、s Annual Report and notes 3031 to the financial statements commencing on page 131 of this Annual Report.36saNTOs ANNUAL report 2011PART 4:RISK MANAGEMENT Relevant policies and charters See Board Guidelines Risk Management Policy 4.1 RISK MANAGEMENT SYSTEMSThe Board is responsible for overseeing the

333、implementation of,and ensuring there are adequate policies in relation to,the Companys risk management and internal compliance and control systems.These systems require Management to be responsible for identifying and managing the Companys material business risks,which include financial and non-financial risks,such as environmental,exploration and investment risks.An Enterprise-Wide Risk Managemen