1、TransformationAnnual Report 2007Inside:Progress made on the growth strategy in 2007 3Gladstone LNG set to transform Santos 14Changing dynamics in the eastern Australia gas market 16Sustainability leadership gives a perceptible advantage 24Santos LtdABN 80 007 550 923Registered and Head OfficeGround
2、Floor Santos Centre60 Flinders StreetAdelaide South Australia 5000GPO Box 2455Adelaide South Australia 5001Telephone:61 8 8116 5000Facsimile:61 8 8116 5050Share RegisterGround Floor Santos Centre60 Flinders StreetAdelaide South Australia 5000GPO Box 2455Adelaide South Australia 5001Telephone:61 8 81
3、16 5000Facsimile:61 8 8116 5950OfficesBrisbaneLevel 14 Santos House60 Edward StreetBrisbane Queensland 4000Telephone:61 7 3228 6666Facsimile:61 7 3228 6700PerthLevel 28 Forrest Centre221 St Georges TerracePerth Western Australia 6000Telephone:61 8 9460 8900Facsimile:61 8 9460 8971Port BonythonPO Box
4、 344Whyalla South Australia 5600Telephone:61 8 8640 3100Facsimile:61 8 8640 3200Roma39 Currey Street Roma Queensland 4455 Telephone:61 7 4622 2400 Facsimile:61 7 4622 3476HanoiSantos Vietnam Pty LtdSuite 701 Level 739 A Ngo QuyenHanoi VietnamTelephone:84 4 220 6000 Facsimile:84 4 220 6002JakartaSant
5、os Asia Pacific Pty LtdLevel 4 Ratu Plaza Office TowerJalan Jendral Sudirman Kav 9Jakarta 10270 IndonesiaPO Box 6221 JKS GNJakarta 12060 IndonesiaTelephone:62 21 2750 2750Facsimile:62 21 720 4503New DelhiSantos International Operations Pty LtdSuite 1907 Level 19 Shangri-La Hotel19 Ashoka Road Connau
6、ght PlaceNew Delhi 110 001 IndiaTelephone:91 11 4119 6900Facsimile:91 11 4119 1908Port MoresbyBarracuda LtdLevel 8 Pacific PlaceCnr Champion Parade andMusgrave StreetPort Moresby Papua New GuineaTelephone:675 321 2633Facsimile:675 321 2847Useful email contactsShare register enquiries:Investor enquir
7、ies:Employment enquiries:WCorporate directorySantos Annual Report 20071416Eastern Australia gasVersatility throughsupply hubsLNG projectsLarge contingentresourcesInsideIntroducing SantosCompany profile and history,and an overviewof Santos vision,strategy and values.2007 operating and financial highl
8、ights 2Key results for 2007 and three-yearperformance.Progress made on the growth strategy in 2007 3Milestones that delivered on the growth strategyduring 2007 and share price performance.Solid performance with exciting outlook 4Chairman Stephen Gerlach comments onSantos performance in 2007.Entering
9、 a period of transformation throughsignificant price and volume growth 5Managing Director John Ellice-Flint reviews a year where Santos put in place some criticalpieces of its growth strategy.A sound operating performance 8Chief Financial Officer Peter Wasow puts thenumbers in perspective and explai
10、ns the 2007financial results.Major announcements made by Santos during 2007 9Summary of how the year was reportedthrough continuous disclosure.Our five strategicgrowth areasThe world of Santos 10Locations of Santos global exploration,development and production activities.Production statistics 2007 1
11、2Summary of production results for 2007.Reserves statistics 2007 13Summary of reserves movements in 2007.LNG projects 14Santos transformational Gladstone LNGproject and progress on Darwin LNG and PNG LNG.Eastern Australia gas 16New contracts and the changing easternAustralia gas market which is prov
12、idingexport opportunities.Cooper Basin oil 18Drilling and production results from theCooper Basin Oil project in 2007 and changeof focus for 2008.Western Australia oil and gas 20Rising gas demand and prices,progress onthe Reindeer development,and Mutineer-Exeter oil production.Asian growth 22Start-u
13、p of Oyong oil production,progress in Vietnam,and new entry into India and Bangladesh.Sustainability 24Sustainability framework,policies,systems and activities,including safety and environmental performance,employees and communities.Board of Directors 32Santos Leadership Team 34Corporate governance
14、36Santos Group interests 4610-year summary 19982007 48Directors Statutory Report 51Remuneration Report 56Financial Report 70Securities exchange and shareholderinformation 152Glossary 154Information for shareholders 156Index 157Corporate directorySAN182 AW2 Cover 19/3/08 1:27 PM Page 1TransformationA
15、nnual Report 2007Inside:Progress made on the growth strategy in 2007 3Gladstone LNG set to transform Santos 14Changing dynamics in the eastern Australia gas market 16Sustainability leadership gives a perceptible advantage 24Santos LtdABN 80 007 550 923Registered and Head OfficeGround Floor Santos Ce
16、ntre60 Flinders StreetAdelaide South Australia 5000GPO Box 2455Adelaide South Australia 5001Telephone:61 8 8116 5000Facsimile:61 8 8116 5050Share RegisterGround Floor Santos Centre60 Flinders StreetAdelaide South Australia 5000GPO Box 2455Adelaide South Australia 5001Telephone:61 8 8116 5000Facsimil
17、e:61 8 8116 5950OfficesBrisbaneLevel 14 Santos House60 Edward StreetBrisbane Queensland 4000Telephone:61 7 3228 6666Facsimile:61 7 3228 6700PerthLevel 28 Forrest Centre221 St Georges TerracePerth Western Australia 6000Telephone:61 8 9460 8900Facsimile:61 8 9460 8971Port BonythonPO Box 344Whyalla Sou
18、th Australia 5600Telephone:61 8 8640 3100Facsimile:61 8 8640 3200Roma39 Currey Street Roma Queensland 4455 Telephone:61 7 4622 2400 Facsimile:61 7 4622 3476HanoiSantos Vietnam Pty LtdSuite 701 Level 739 A Ngo QuyenHanoi VietnamTelephone:84 4 220 6000 Facsimile:84 4 220 6002JakartaSantos Asia Pacific
19、 Pty LtdLevel 4 Ratu Plaza Office TowerJalan Jendral Sudirman Kav 9Jakarta 10270 IndonesiaPO Box 6221 JKS GNJakarta 12060 IndonesiaTelephone:62 21 2750 2750Facsimile:62 21 720 4503New DelhiSantos International Operations Pty LtdSuite 1907 Level 19 Shangri-La Hotel19 Ashoka Road Connaught PlaceNew De
20、lhi 110 001 IndiaTelephone:91 11 4119 6900Facsimile:91 11 4119 1908Port MoresbyBarracuda LtdLevel 8 Pacific PlaceCnr Champion Parade andMusgrave StreetPort Moresby Papua New GuineaTelephone:675 321 2633Facsimile:675 321 2847Useful email contactsShare register enquiries:Investor enquiries:Employment
21、enquiries:WCorporate directorySantos Annual Report 20071416Eastern Australia gasVersatility throughsupply hubsLNG projectsLarge contingentresourcesInsideIntroducing SantosCompany profile and history,and an overviewof Santos vision,strategy and values.2007 operating and financial highlights 2Key resu
22、lts for 2007 and three-yearperformance.Progress made on the growth strategy in 2007 3Milestones that delivered on the growth strategyduring 2007 and share price performance.Solid performance with exciting outlook 4Chairman Stephen Gerlach comments onSantos performance in 2007.Entering a period of tr
23、ansformation throughsignificant price and volume growth 5Managing Director John Ellice-Flint reviews a year where Santos put in place some criticalpieces of its growth strategy.A sound operating performance 8Chief Financial Officer Peter Wasow puts thenumbers in perspective and explains the 2007fina
24、ncial results.Major announcements made by Santos during 2007 9Summary of how the year was reportedthrough continuous disclosure.Our five strategicgrowth areasThe world of Santos 10Locations of Santos global exploration,development and production activities.Production statistics 2007 12Summary of pro
25、duction results for 2007.Reserves statistics 2007 13Summary of reserves movements in 2007.LNG projects 14Santos transformational Gladstone LNGproject and progress on Darwin LNG and PNG LNG.Eastern Australia gas 16New contracts and the changing easternAustralia gas market which is providingexport opp
26、ortunities.Cooper Basin oil 18Drilling and production results from theCooper Basin Oil project in 2007 and changeof focus for 2008.Western Australia oil and gas 20Rising gas demand and prices,progress onthe Reindeer development,and Mutineer-Exeter oil production.Asian growth 22Start-up of Oyong oil
27、production,progress in Vietnam,and new entry into India and Bangladesh.Sustainability 24Sustainability framework,policies,systems and activities,including safety and environmental performance,employees and communities.Board of Directors 32Santos Leadership Team 34Corporate governance 36Santos Group
28、interests 4610-year summary 19982007 48Directors Statutory Report 51Remuneration Report 56Financial Report 70Securities exchange and shareholderinformation 152Glossary 154Information for shareholders 156Index 157Corporate directorySAN182 AW2 Cover 19/3/08 1:27 PM Page 1Strategic gains in 2007 signal
29、 an exciting period oftransformation for Santosfrom a leading domestic oil and gas producer to a majorexporter of LNG.1202218Cooper Basin oilUnique infrastructureand know-howWestern Australia oil and gasGrowth at higher pricesAsian growthGrowing internationalprofileSAN182 AW2 Text 19/3/08 1:21 PM Pa
30、ge 1Santosis a major Australian-basedoil and gas exploration and production company operating internationally.VisionSantos vision is to become aleading energy company in SouthEast Asia with a share price thatcontinues to grow and a reputationfor sustainability in its operations.Our vision of future
31、success is to be a safe,low-cost,fast-movingexplorer and producer and an agileniche player with a well-developedability to manage relationships withemployees,partners and otherstakeholders.As the Company grows,it willprovide a working environment thatencourages innovation across thebusiness and wher
32、e employees areengaged in something which istangibly more than just a job.StrategySantos has in place a robust growth strategy to achieve its vision through a portfolio of growth businesses:LNG projects;Eastern Australia gas;Cooper Basin oil;Western Australia oil and gas;and Asian growth.ValuesWe ar
33、e a team that:discovers by opening ourminds to new possibilities,thinking creatively and havingthe courage to learn fromsuccesses and failures,to take on new challenges,to capture opportunities and to resolve problems;delivers by taking personalresponsibility and pride in ourwork to deliver timely,q
34、ualityresults that benefit Santos and help achieve our vision and strategy;collaborates by recognisingthe value and power in diversityof thought and communicatingopenly to understand theperspectives of others;demonstrating leadership by sharing what we know and respectfully challenging each other to
35、 achieve the best results for all;and cares by taking the long-termview to build a sustainable futurefor our Company,our people and the environments andcommunities in which we operate.CompanyprofileSantos has exploration interests or production operations in everymajor Australian petroleum province
36、and in Indonesia,Papua New Guinea,Vietnam,India,Bangladesh,Kyrgyzstan and Egypt.We are Australias largest domesticgas producer,supplying sales gas to all mainland Australian statesand territories,ethane to Sydney,and oil and liquids to domestic and international customers.Through our interest in the
37、 DarwinLNG project,we are a producer ofliquefied natural gas(LNG)which is exported to customers in Japan.Santos has more than 1,750employees and produced 59.1million barrels of oil equivalent(mmboe)in 2007.Santos has the largest Australianexploration and productionportfolio by area of any company 19
38、2,000 square kilometres and is pursuing new ventureopportunities in Asia.HistoryFounded in 1954,our name was an acronym for South AustraliaNorthern Territory Oil Search.Santos made its first significantdiscovery of natural gas in theCooper Basin in 1963.The Moombadiscovery in 1966 confirmed thisregi
39、on as a major petroleumprovince and gas supplies toAdelaide commenced in 1969.The 1980s saw Santos develop amajor liquids business with theconstruction of a liquids recoveryplant at Moomba and a fractionationand load-out facility at PortBonython.During the 1990s Santosfurther expanded its interests
40、inAustralia and overseas.Since 2000 the Company hascontinued to build its business inSouth East Asia while undertakinghigh-impact exploration anddeveloping new projects to driveproduction and earnings growth.In 2006,a significant milestone wasreached with the first export of LNGfrom the Darwin LNG p
41、roject.AAnnouncements:2007 9Annual General Meeting 156Audit Committee 40,42,52,54Audit Report 151Australian Business&Climate Group6,29BBalance Sheets 71Bangladesh3,4,5,1011,23Basins 1011Bayu-Undan 8,11Board of Directors 3233CCarbon storage7,19Cash Flow Statements 72Casino11,17Chairmans review 4Chief
42、 Executive Officers review 57Chief Financial Officers review8Climate change 6,7,19,29,43Committees 4042,52Company profile Inside front coverContinuous disclosure 9,4445Cooper Basin 3,5,17,1819,26,29,30Cooper Basin Oil project 3,1819Corporate directory Back coverCorporate governance statement 3645Cor
43、porate structure 31DDarwin LNG 3,5,8,15Development projects 4,7,1011,15,17,21,23Directors fees 5859Directors profiles 3233Directors remuneration 5859Directors shareholdings 51Dividends 2,4,49,53,68,154Drilling results 3,19,23EEarnings 2,4,6,8,4849,88Earnings per share 2,49,107108 Egypt 10Employee pr
44、ograms and statistics 2628Environment 6,7,17,25,27,2829 Environment,Health,Safety andSustainability Committee 41Executive management team 3435Exploration 3,56,1011,15,19,21,23FFairview 11,15,1617,26Finance Committee 42Financial summary 2Financial statements 5,70151GGas contracts 3,17,21Gas fields 10
45、11Gladstone LNG3,56,11,1415,17,26,31Glossary 154156Greenhouse 5,25,2829,41Group interests 4647Growth progress 3,57HHenry3,7,11,17History Inside front coverIIncome Statements 70India3,4,5,1011,23Indigenous relations 31Indonesia 4,5,7,1011,15,2223,29,31JJeruk 11John Brookes 3,11,21KKey performance ind
46、icators 6768Kipper3,7,11,17Kyrgyzstan 1011,23LLicence areas and percentage interests 4647LNG 1,3,4,57,8,1415,1617,21,26,31MMaleo 8,11,23Management structure 31Maps 1011Moomba Carbon Storage project 7,19Mutineer-Exeter 11,2021NNew ventures 3,4,5,23Nomination Committee 38,41OOccupational health and sa
47、fety 2,56,2528Oil fields 1011Oil spill performance 19,2829,Operating highlights 23Oyong 3,8,11,2223PPapua New Guinea 4,5,7,11,15,29Performance(10-year summary)4849Performance(three-year summary)23Production statistics 12PNG LNG3,5,7,15RReindeer3,7,11,21Remuneration 5669Remuneration Committee 38,41,6
48、0,63Reserves statistics 2,3,6,13,15,19Risk management 40,4243,144SSafety performance 2,56,2526Senior executives 3435Share information 2,3,4,6768,152153Share price 3,4,67Shareholders:top 20 152153Sidoarjo(Banjar Panji-1)mudflow4,53Statements of Recognised Income and Expense 73Strategy Inside front co
49、ver,1,3,4,56,25,27Sustainability 67,2431Sponsorship 2931T10-year summary 4849Total recordable case frequency rate 2,56,26UUnited States 56,19,2930VValues Inside front cover,25,27,30,44Vietnam 3,4,6,10,23Vision Inside front cover,5Designed and produced by P.All photography by Robert Garvey except pag
50、es 4,5,7,3233 and 3435 by Milton Wordley and pages 7,24,28 and 36 by Andy Rasheed.Index157Premium WilCraft jack-up rig being transported to the Carnarvon Basin,offshore Western Australia,for exploration drilling.SAN182 AW2 Cover 19/3/08 1:27 PM Page 2Santosis a major Australian-basedoil and gas expl
51、oration and production company operating internationally.VisionSantos vision is to become aleading energy company in SouthEast Asia with a share price thatcontinues to grow and a reputationfor sustainability in its operations.Our vision of future success is to be a safe,low-cost,fast-movingexplorer
52、and producer and an agileniche player with a well-developedability to manage relationships withemployees,partners and otherstakeholders.As the Company grows,it willprovide a working environment thatencourages innovation across thebusiness and where employees areengaged in something which istangibly
53、more than just a job.StrategySantos has in place a robust growth strategy to achieve its vision through a portfolio of growth businesses:LNG projects;Eastern Australia gas;Cooper Basin oil;Western Australia oil and gas;and Asian growth.ValuesWe are a team that:discovers by opening ourminds to new po
54、ssibilities,thinking creatively and havingthe courage to learn fromsuccesses and failures,to take on new challenges,to capture opportunities and to resolve problems;delivers by taking personalresponsibility and pride in ourwork to deliver timely,qualityresults that benefit Santos and help achieve ou
55、r vision and strategy;collaborates by recognisingthe value and power in diversityof thought and communicatingopenly to understand theperspectives of others;demonstrating leadership by sharing what we know and respectfully challenging each other to achieve the best results for all;and cares by taking
56、 the long-termview to build a sustainable futurefor our Company,our people and the environments andcommunities in which we operate.CompanyprofileSantos has exploration interests or production operations in everymajor Australian petroleum province and in Indonesia,Papua New Guinea,Vietnam,India,Bangl
57、adesh,Kyrgyzstan and Egypt.We are Australias largest domesticgas producer,supplying sales gas to all mainland Australian statesand territories,ethane to Sydney,and oil and liquids to domestic and international customers.Through our interest in the DarwinLNG project,we are a producer ofliquefied natu
58、ral gas(LNG)which is exported to customers in Japan.Santos has more than 1,750employees and produced 59.1million barrels of oil equivalent(mmboe)in 2007.Santos has the largest Australianexploration and productionportfolio by area of any company 192,000 square kilometres and is pursuing new ventureop
59、portunities in Asia.HistoryFounded in 1954,our name was an acronym for South AustraliaNorthern Territory Oil Search.Santos made its first significantdiscovery of natural gas in theCooper Basin in 1963.The Moombadiscovery in 1966 confirmed thisregion as a major petroleumprovince and gas supplies toAd
60、elaide commenced in 1969.The 1980s saw Santos develop amajor liquids business with theconstruction of a liquids recoveryplant at Moomba and a fractionationand load-out facility at PortBonython.During the 1990s Santosfurther expanded its interests inAustralia and overseas.Since 2000 the Company hasco
61、ntinued to build its business inSouth East Asia while undertakinghigh-impact exploration anddeveloping new projects to driveproduction and earnings growth.In 2006,a significant milestone wasreached with the first export of LNGfrom the Darwin LNG project.AAnnouncements:2007 9Annual General Meeting 15
62、6Audit Committee 40,42,52,54Audit Report 151Australian Business&Climate Group6,29BBalance Sheets 71Bangladesh3,4,5,1011,23Basins 1011Bayu-Undan 8,11Board of Directors 3233CCarbon storage7,19Cash Flow Statements 72Casino11,17Chairmans review 4Chief Executive Officers review 57Chief Financial Officers
63、 review8Climate change 6,7,19,29,43Committees 4042,52Company profile Inside front coverContinuous disclosure 9,4445Cooper Basin 3,5,17,1819,26,29,30Cooper Basin Oil project 3,1819Corporate directory Back coverCorporate governance statement 3645Corporate structure 31DDarwin LNG 3,5,8,15Development pr
64、ojects 4,7,1011,15,17,21,23Directors fees 5859Directors profiles 3233Directors remuneration 5859Directors shareholdings 51Dividends 2,4,49,53,68,154Drilling results 3,19,23EEarnings 2,4,6,8,4849,88Earnings per share 2,49,107108 Egypt 10Employee programs and statistics 2628Environment 6,7,17,25,27,28
65、29 Environment,Health,Safety andSustainability Committee 41Executive management team 3435Exploration 3,56,1011,15,19,21,23FFairview 11,15,1617,26Finance Committee 42Financial summary 2Financial statements 5,70151GGas contracts 3,17,21Gas fields 1011Gladstone LNG3,56,11,1415,17,26,31Glossary 154156Gr
66、eenhouse 5,25,2829,41Group interests 4647Growth progress 3,57HHenry3,7,11,17History Inside front coverIIncome Statements 70India3,4,5,1011,23Indigenous relations 31Indonesia 4,5,7,1011,15,2223,29,31JJeruk 11John Brookes 3,11,21KKey performance indicators 6768Kipper3,7,11,17Kyrgyzstan 1011,23LLicence
67、 areas and percentage interests 4647LNG 1,3,4,57,8,1415,1617,21,26,31MMaleo 8,11,23Management structure 31Maps 1011Moomba Carbon Storage project 7,19Mutineer-Exeter 11,2021NNew ventures 3,4,5,23Nomination Committee 38,41OOccupational health and safety 2,56,2528Oil fields 1011Oil spill performance 19
68、,2829,Operating highlights 23Oyong 3,8,11,2223PPapua New Guinea 4,5,7,11,15,29Performance(10-year summary)4849Performance(three-year summary)23Production statistics 12PNG LNG3,5,7,15RReindeer3,7,11,21Remuneration 5669Remuneration Committee 38,41,60,63Reserves statistics 2,3,6,13,15,19Risk management
69、 40,4243,144SSafety performance 2,56,2526Senior executives 3435Share information 2,3,4,6768,152153Share price 3,4,67Shareholders:top 20 152153Sidoarjo(Banjar Panji-1)mudflow4,53Statements of Recognised Income and Expense 73Strategy Inside front cover,1,3,4,56,25,27Sustainability 67,2431Sponsorship 2
70、931T10-year summary 4849Total recordable case frequency rate 2,56,26UUnited States 56,19,2930VValues Inside front cover,25,27,30,44Vietnam 3,4,6,10,23Vision Inside front cover,5Designed and produced by P.All photography by Robert Garvey except pages 4,5,7,3233 and 3435 by Milton Wordley and pages 7,
71、24,28 and 36 by Andy Rasheed.Index157Premium WilCraft jack-up rig being transported to the Carnarvon Basin,offshore Western Australia,for exploration drilling.SAN182 AW2 Cover 19/3/08 1:27 PM Page 22Santos Annual Report 20072007 operating and financial highlights Production of 59.1 mmboe and sales r
72、evenue of$2.5 billion,in line with forecast.EBITDAX of$1,733 million.Net profit after tax of$441 million,down 32%,negatively impacted by higher depreciation anddepletion,and one-off items.Full-year dividend unchanged at 40 cents per share.Strong 2007 reserves replacement ratio of 175%(Proven)and 178
73、%(Proven plus Probable).Contingent resources increased 15%to 2.6 billion boe.%20072006change Sales($million)2,488.52,750.3(10)Operating profit before tax($million)601.0964.7(38)Cash flow from operations($million)1,213.91,550.3(22)Earnings per share(cents)68.9102.8(33)Ordinary dividends per share(cen
74、ts)40.040.0 0Cash flow per share(cents)205.6260.0(21)Total shareholders funds($million)3,310.53,355.5(1)Return on average ordinary equity(%)15.223.8(36)Return on average capital employed(%)10.415.1(31)Net debt/(net debt plus equity)(%)36.430.2 21Net interest cover(times)6.410.1(37)SAN182 AW2 Text 19
75、/3/08 1:21 PM Page 23Santos Annual Report 2007Progress made on the growth strategy in 2007Santos share price vs ASX All Ordinaries Index three-year relative performance$Santos(STO)ASX All Ordinaries246810121416January 2005 January 2006 January 2007 December 2007Tipperary acquisitionBayu-Undan LNGsta
76、rt-upMaleo start-upJohn Brookes start-upOyong&Maleo sanctionCasino start-upParliamentary approval to remove 15%shareholding cap Mutineer-Exeterstart-upCaldita discoveryOyong oil start-upBangladesh acreage awardedGladstone LNGannouncedIndia acreage awardedHenry,Kippersanction$300 million share buy-ba
77、ckVietnam acreageawardedLNG projectspage 14$7 billion Gladstone LNG projectannounced,with freehold site acquiredand Significant Project status grantedby the Queensland Government.Santos share in the Darwin LNG projectincreased from 10.6%to 11.4%througha formal redetermination process.Ongoing apprais
78、al and concept studiesof Timor/Bonaparte gas discoveries tosupport the further potential expansionof the Darwin LNG plant.PNG LNG pre-front-end engineering and design progressed,along withregulatory processes.Eastern Australia gaspage 16Coal seam gas activity increased tosupport Gladstone LNG.Ethane
79、 contract with Qenos extendedto supply up to an additional 56 PJ.Henry and Kipper gas projectssanctioned.Conditional contracts with NexusEnergy finalised to process andpurchase up to 350 PJ gas and liquidsfrom the Longtom field.Cooper Basin oilpage 18132 wells drilled with a 73%success rate.8 mmbbl
80、of 2P reserves added.Production rates of approximately 9,100 bopd net to Santos.Western Australia oil and gaspage 20Three new John Brookes gas supplycontracts awarded by Newmont,Barrick Gold and Jabiru Metals.Front-end engineering and designstarted for the Reindeer gas field.Asian growthpage 22Oil p
81、roduction started from the Oyongfield,offshore East Java.New country entry into India andBangladesh,with Magnama well resultsunder evaluation.3D seismic acquired over Song HongBasin,offshore Vietnam.SAN182 AW2 Text 19/3/08 1:21 PM Page 34Santos Annual Report 2007After record production and profits i
82、n 2006,Santos produced another solid performancein 2007.Production was in line with guidance for the third successive year at 59.1 mmboe,although 3%lower than in 2006.Net profit after tax of$441 million was 32%lower than 2006,reflecting the decline inhigher margin oil production,the increasingcontri
83、bution of lower margin gas in our productmix,rising industry costs leading to higherdepreciation and depletion charges,highertaxes,and a strong dollar.Share price performanceAgainst the backdrop of a volatile sharemarket,Santos was one of the best performingstocks among leading Australian companiesi
84、n 2007,with a strong gain in the share priceand healthy dividends resulting in totalshareholder return of 48%.Share market sentiment toward Santos was influenced by several factors includingrising world energy prices,a realisation that Santos was strategically poised to be a major beneficiary of the
85、 removal of the 15%shareholding restriction,and the announcement of our intention to construct a LNG plant at Gladstone in Queensland.Dividend maintainedThe Board of Directors declared a final dividendof 20 cents per share.With the earlier interimpayment maintained at the same level,shareholders rec
86、eived a full-year dividend of 40cents per share unchanged from 2006.Pivotal year for strategyFor Santos,2007 marked a pivotal year in the implementation of our strategy to gainexposure to global prices for our large-scaleresources,which we expect to transform theCompany through significant volume gr
87、owthand margin expansion.It is now evident that sufficient coal seamgas exists in eastern Australia for Santos todevelop a large-scale LNG export business.The creation of this export channel willunderpin a fundamental shift in the value of Santos eastern Australia gas resources as the gap between As
88、ian and domesticenergy prices closes.Santos was the early mover in recognisingand capturing this opportunity,and haspositioned itself by amassing a large,high-quality coal seam gas resource position andby leading the development of an export LNG project at Gladstone.In Asia,Santos continued to build
89、 a portfolioof growth opportunities in new marketsincluding Vietnam,India and Bangladesh,aswell as expanding our interests in Indonesiaand Papua New Guinea.Off-market buy-backSantos completed an off-market buy-backtender for approximately$300 million ofordinary shares in June 2007.The initiativerefl
90、ected our significant franking creditbalance and the Boards view that theCompanys shares were being undervalued by the market.Directors were delighted with the results ofthe buy-back which saw us acquire 4.1%ofour issued capital at the maximum discountof 14%to the prevailing market price.Shareholdin
91、g restriction to goIn November 2007,and at our request,the South Australian Parliament repealed the legislation which restricts any oneshareholder from having an entitlement to more than 15%of Santos shares.Believing the shareholder cap is no longerrelevant,the Board was extremely pleasedwith this o
92、utcome,which takes effect on 29 November 2008.The caps removal willmark an exciting new era for Santos as itpursues its many growth initiatives.Sidoarjo mudflow incidentWhile the mudflow from the Sidoarjo incidentin East Java continues,there were a numberof positive developments during 2007.These in
93、clude general containment of the mudwithin the existing dyke system,establishmentof the Sidoarjo Mud Mitigation Agency,continued active support and funding by theGovernment of Indonesia for relief efforts andinfrastructure replacement,a reduction in thenumber of refugees affected by the incidentand
94、a recent decision by the South JakataDistrict Court in respect of responsibility forthe incident,which was in favour of alldefendants,including Santos Brantas Pty Ltd.At the Board tableThe appointment of Mr Kenneth Borda inFebruary 2007 was the only change to theBoard of Directors during the year.Mr
95、 Borda,55,has extensive internationalbusiness experience and was formerly CEO Middle East and North Africa of DeutscheBank,based in Dubai.On behalf of the Directors,I again thankeveryone at Santos for their continuingcommitment to protecting and advancingthe interests of shareholders.Stephen Gerlach
96、Chairman13 March 2008Solid performance with exciting outlookReview byStephen GerlachChairmanSAN182 AW2 Text 19/3/08 1:21 PM Page 45Santos Annual Report 2007Many critical pieces of Santos growthstrategy were put into place during 2007.This strategy is all about gaining exposure to global prices for o
97、ur large-scale resources.The international trends for the oil and gasindustry are becoming increasingly clear andSantos is well positioned to capitalise on them.Unprecedented global economic growth,including the industrialisation andurbanisation of China and India,will continue for several decades a
98、s billions of people aspire to a better way of life.This growth is energy intensive and is causinga step change in energy demand and pricing.Where will this energy come from?In whatforms?Over what timeframe?These issues are not yet resolved.The world is increasingly reliant on less stableareas for e
99、nergy supplies.About 90%of newprimary energy production is projected tocome from transitioning and developingeconomies,up from 60%in the previousthree decades.In this regard,Australian energy supplies are increasingly seen as lower risk.The potential to substitute coal and nuclearpower for oil is li
100、mited by greenhouse gas impacts,environmental regulations,resource issues and voter opposition.In this environment,natural gas isincreasingly becoming the fuel of choice.To meet the growing levels of demand,the oil and gas industry is investing heavily inunconventional technologies.Oil sands,coalsea
101、m gas and tight gas are rapidly becomingthe mainstream as higher oil and gas pricesrender them economic.Consistent with these trends,global demandfor LNG continues to expand.Asian demandfor LNG imports is predicted to grow by 85%over the next five years,while LNG imports tothe United States increase
102、d by about 35%in2007 alone to meet the shortfall in domesticgas production.LNG,which is marketed globally at priceslinked to oil,has seen recent contract pricesof more than four times the prevailing priceof gas in eastern Australia.Strategy to meet growing energy demandSantos strategy and portfolio
103、fit thesetrends.As Australias largest domestic gasproducer,Santos has the scale,expertise and cash flow necessary to take our businessto the next level.Specifically,we intend to:Provide reliable LNG exports and growour LNG portfolio to greater than 50%of our total production by 2020,throughan indust
104、ry-leading project at Gladstonein Queensland,the expansion of DarwinLNG,and Papua New Guineas first LNG project.Maintain our leading position inunconventional gas in Australia.Santoscoal seam gas reserves in Queensland nowexceed our conventional gas reserves fromthe Cooper Basin,in addition to the t
105、ightgas potential in the Cooper Basin.SantosGladstone LNG project will be the worldsfirst large-scale project to convertunconventionalgas to LNG.Continue to build our business in Asia,with our recent entry into Vietnam,Indiaand Bangladesh adding to our position inIndonesia and Papua New Guinea.At a
106、time when exploration and productioncompanies are finding reserves difficult toreplace and growth hard to achieve,Santoshas built a portfolio which can quadruple thesize of its reserves base in the next decadefrom already captured opportunities.The next few years promise to be exciting for our share
107、holders,employees,customersand partners as we realise our vision to be a leading energy company in Asia.Safety improvedSantos improved safety during 2007 bysuccessfully implementing new standards on process safety and achieving a reductionin the rate of injuries to employees andcontractors.Injury ra
108、te as measured by total recordablecase frequency rate fell by 17%to 5.3 in2007.This performance improvement in 2007 was an excellent achievement and areflection of the hard work put in by manypeople across the Company.Our safety systems and performance wererecognised during 2007,with Santos winningf
109、our of the six categories at the Self Insurersof South Australia safety awards and twoawards at the Safe Work SA awards,includingEmployer of the Year.Entering a period oftransformation throughsignificant price and volume growthReview byJohn Ellice-FlintManaging DirectorSAN182 AW2 Text 19/3/08 1:21 P
110、M Page 56Santos Annual Report 2007Santos has an extensive work programplanned for 2008 and is projecting a recordnumber of work-hours for employees andcontractors.We are challenging theorganisation to target its best totalrecordable case frequency rate performancewith a target of less than 4.8 in 20
111、08,that is4.8 injuries for every million hours worked.Solid operational performanceSantos operating performance in 2007 wassound and,while our production volumeswere down,they were in line with ourguidance.The lower profit reflects theselower volumes,industry cost pressures whichare impacting expect
112、ed future developmentcosts,and higher taxes.Earnings before interest,tax,depreciation,depletion,exploration and impairmentexpenses of$1.7 billion were 19%lower than in 2006.Net profit after tax of$441 million wasadversely affected by the cost factors beingfelt across the industry.Our average gas pri
113、ce received increased by6%to$3.95 per gigajoule.A 19%increase inthe United States dollar oil price was offsetby the stronger Australian dollar exchangerate.In Australian dollar terms,the oil priceof$92.10 was 3%above 2006.Reserves grow strongly,at low costSantos is entering a period of unprecedented
114、reserve growth from discovered resources,much of which the Company has capturedearly and at low cost.Our contingent resource base,which has grown to 2.6 billion boe,or roughly 15 trillion cubic feet of gas,is mostly pointed at LNG opportunities.Santos Proven plus Probable(2P)year-end reserves increa
115、sed to 879 mmboe,representing a reserve replacement ratio of 178%for 2007 and a three-year rollingaverage of 234%.This places us within thetop quartile of our peer companies globally.The rate of replacement is only half the story.The cost of replacement is perhaps even moreimportant.Over the past fo
116、ur years,we havebeen able to reduce the cost of a replacementbarrel to around$13,from about$17 in 2004.Our reserves and production leadershipprovide the opportunity for step changes in both the price and volume of sales we can deliver into Asian markets.Gladstone LNG the inflection point Santos trad
117、itional focus has been on the domestic Australian market,where we are the largest gas producer.Our strategy for the future is to sell our products in Asia at higher prices,wheredemand is growing strongly.Coal seam gas is the driver of thistransformational strategy and Gladstone LNG is critical to th
118、is process.It creates a value uplift point by directing our coal seam gas into LNG export markets.The substantial price difference betweeneastern Australia and South East Asia gasprices is unsustainable,especially as demandin both markets is rapidly increasing and thereis now sufficient gas to make
119、export viable.Santos is clearly not the only company torecognise the potential of exporting coalseam gas but does have the leading positionamong potential east coast LNG producers.We have a large and growing reserves base,a freehold site to build the LNG plant and our proposal has been designated aS
120、ignificant Project by the QueenslandGovernment the only proposed LNG project to have this status.United States business divestedSantos finalised the sale of its United States business in July 2007,entering intoagreements to sell these exploration andproduction interests for approximately US$70 milli
121、on.The decision to sell the United Statesbusiness was part of Santos broader strategy of focusing our internationalbusiness in Asia:the region where ourgeologic knowledge,experience andnetworks are strongest and where energydemand is growing faster than anywhere else in the world.Sustainability lead
122、ership an advantage Santos has placed sustainability at the forefront of all corporate activity formany years and has been a leader amongmajor Australian companies in arguing forimmediate and meaningful action to combatclimate change.In 2007 our leadership in this area was evident.We were a founding
123、 member of the AustralianBusiness&Climate Group,which comprisednine leading companies from the resource,energy,infrastructure and finance industries.The group published a report recommendingthe development of a national climate changeresponse to address five main elements:global action,emissions tra
124、ding,complementarymeasures,low emissions technology strategyand an adaptation strategy.02004006008001P2PProven plus Probable reservesmmboeReserve replacement cost2005200420062007$6437748198790481216Review by John Ellice-Flint,Managing Director(continued)Santos has achieved a three-year rolling avera
125、ge2P reserve replacement ratio of 234%andreduced replacement cost to approximately$13 per barrel.SAN182 AW2 Text 19/3/08 1:21 PM Page 67Santos Annual Report 2007Santos also won the Australian PetroleumProduction and Exploration AssociationsEnvironment Award.This award recognisedour five-year partner
126、ship with universityresearchers which has provided a valuableinsight into how offshore exploration andwhales can coexist.We are also very proud of our new SantosCentre in Adelaide which exemplifiessustainable building design.Moomba Carbon Storage progressedAnother confirmation of our commitment to e
127、nvironmental sustainability was Santoscontinuing efforts to build public policysupport for carbon geosequestrationgenerally,and the Moomba Carbon Storageproject in particular.The extensive gas processing,storage andtransport infrastructure of eastern Australiahas the potential to play a critical rol
128、e inAustralias response to climate change.Since 2006,Santos has been incubating Moomba Carbon Storage a project thatwould transform Moomba from an iconicpiece of Australias energy infrastructure into a practical and world-leading climatechange facility supporting clean energythroughout eastern Austr
129、alia.Santos is continuing to discuss the projectwith a range of stakeholders,including federaland state governments,and relevant industryparticipants,including power generators,pipeliners and infrastructure funds.Outlook for unprecedented growth Santos has a rich suite of LNG opportunities,from new
130、projects in Papua New Guinea andGladstone,to expansions at Darwin and exploration opportunities in the BrowseBasin and Indonesia.Developing these resources,and the exportfacilities necessary to monetise them,createsa new set of quality investments for Santos.The richness of our emerging developments
131、 is a distinguishing characteristic as we moveinto the last part of this decade.In the immediate term,the productionoutlook for 2008 is for 5658 mmboe,marginally down on 2007.Volume gains from attractive developmentprojects,such as Henry and Kipper inVictoria,Reindeer in Western Australia andChim Sa
132、o in Vietnam,will arrest this declineas we build momentum toward a step changein cash flow growth.We look forward to a return to productiongrowth in 2009.There will be a steady flow of importantmilestones that will act as catalysts for theCompany as our growth prospects mature.Over the longer term,n
133、o other company hasthe breadth of resources potential,nor isbetter placed to develop them,than Santos.John Ellice-FlintManaging Director13 March 2008Santos has built a portfolio which can quadruplethe size of its reserves base in the next decadefrom already captured opportunities.Santos Centre:the k
134、nowledge baseDesigned with a long-term horizon,Santos new head office is an innovativeblend of people-friendly workspaces and leading edge technology.It incorporates the Companys strong commitment to sustainability and the health and wellbeing of Santos employees.SAN182 AW2 Text 19/3/08 1:21 PM Page
135、 78Santos Annual Report 2007A sound operatingperformanceReview byPeter WasowChief Financial OfficerProduction and sales Total sales revenue for the 12 months to 31 December 2007 was$2,489 million,down 10%on the record$2,750 millionachieved in 2006.The lower revenue reflects a 3%decline inproduction
136、volumes of 59.1 mmboe and a15%appreciation in the AustralianUS dollarexchange rate,partially offset by highercommodity prices.Product prices increased Higher commodity prices were evident acrossSantos portfolio,with the average gas priceincreasing by 6%to$3.95 per gigajoule.A 19%increase in the US d
137、ollar oil price was offset by the stronger Australian dollarexchange rate.In Australian dollar terms,the oil price of$92.10 was 3%above that of 2006.Production costs and netbackUnit production costs of$7.59/boe were 18%higher than in 2006,reflecting the start of production from Oyong,and Maleoand Da
138、rwin LNG producing for the full year.In addition,cost increases primarily resulted from industry cost pressures,increased trucking costs relating to theMoonie to Brisbane pipeline failure andhigher Bayu-Undan costs resulting from the total plant and pipeline shutdown.The cash margin per boe sold,or
139、netback,of$30.80 per boe was 6%lower than in 2006,reflecting the higher production costs,higheramounts of Petroleum Resources Rent Tax andthe commencement of Additional Profits Taxfor the Bayu-Undan field.Depreciation and depletionDepreciation and depletion expense of$12.84/boe was 13%higher than 20
140、06 as the benefits of reserves additions were outweighed by higher future development costs.The expense also reflected a full year ofproduction from Casino,Darwin LNG andMaleo,the start-up of Oyong production andthe acquisition of Santos Bangladesh interest.Net profit after taxNet profit after incom
141、e tax decreased by$203 million to$441 million and earnings per share decreased by 33%to 68.9 cents.Cash flow and balance sheetOperating cash flow remained strong at$1,214 million,although 22%below 2006,as a result of decreased sales volumes andincreased payments for royalties,excise,Petroleum Resour
142、ces Rent Tax and incometaxes,partly offset by higher product pricesand lower payments to suppliers.Net debt of$1,896 million was$446 million higher than at the end of 2006,primarily as a result of the$300 million share buy-back undertaken during the year,acquisition activity and capital expenditure.
143、Santos net debt/net debt plus equity ratioincreased from 30.2%in 2006 to 36.4%atthe end of 2007.SAN182 AW2 Text 19/3/08 1:21 PM Page 89Santos Annual Report 2007Major announcementsmade by Santos during 200722 Jan New$90 million Newmont gas supply contract awarded23 Jan Santos CSG supplementary bidder
144、s statement and extension of offer24 Jan 2006 Fourth Quarter Activities Report30 Jan Santos proposes new superior transaction with QGC9 Feb Caldita-2 drilling update12 Feb Indian exploration acreage awarded15 Feb Santos submits formal superior offer to QGC Board15 Feb New General Counsel and Company
145、 Secretary appointed15 Feb International banker appointed to Board21 Feb Santos confirms it will not proceed with offer for QGC22 Feb 2006 Full Year Results:underlying net profit a record$683 million,up 7%23 Feb Managing Director remuneration arrangements29 Mar 2006 Annual Report,Sustainability Repo
146、rt and Notice of Meeting released11 Apr Commencement of PNG LNG pre-front-end engineering study24 Apr 2007 First Quarter Activities Report26 Apr Longtom contract finalised1 May South Australian Government review of 15%shareholding cap1 May 2007 Annual General Meeting14 May$300 million off-market buy
147、-back announced15 May Cooper Basin ethane contract with Qenos extended31 May Off-market buy-back booklet released14 Jun Moomba Carbon Storage demonstration project15 Jun Santos lodges submission to South Australian Government shareholding cap review30 Jun Off-market buy-back successfully completed03
148、 Jul New Executive Vice President Growth Businesses appointed16 Jul Santos sells its United States interests18 JulMulti-billion dollar Gladstone LNG project proposed26 Jul 2007 Second Quarter Activities Report30 Jul Santos interest in Bayu-Undan development increased30 Jul Moonie to Brisbane pipelin
149、e incident14 Aug Commencement of front-end engineering and design for Reindeer field23 Aug 2007 Interim Results:underlying net profit after tax of$305 million11 Sep Santos discussions with South Australian Government regarding 15%shareholding cap24 Sep First oil from Oyong development 16 Oct South A
150、ustralian Government decision to remove Santos 15%shareholding cap25 Oct 2007 Third Quarter Activities Report26 Oct Santos acquires interests in Bangladesh30 Oct Mutineer-13 drilling result22 Nov South Australian Parliamentary approval of 15%shareholding cap removal28 Nov Henry gas project sanctione
151、d19 Dec Kipper gas project sanctioned24 Dec Mutineer-Exeter production update 28 Dec Indonesian court decision regarding Banjar Panji-1 well incidentDates shown are when announcements were made to the exchanges where Santosshares are listed:the Australian SecuritiesExchange(ASX)and NASDAQ.As part of
152、 Santos continuous disclosure,theCompany informs the market of informationthat may affect the Companys share price.All material announcements disclosed to theASX are published on Santos website,.The Santos website provides an email alertfacility where people can register to benotified,free of charge
153、,of Santos NewsAnnouncements via email,as well as an RSS feed which allows people to view theseannouncements using RSS reader software.SAN182 AW2 Text 19/3/08 1:21 PM Page 910Santos Annual Report 2007050kilometresSouth East JulyGulfof SuezNorth Qarun0100kilometresAkBuraCharvakEast MailisuWest Mailis
154、uKatranBatkenSuluktaAshvazNanaiSohWest SohTuzlukNaushkent SKaagJ050kilometresVictoriaLongfordVIC/RL2VIC/RL3SoleKipperVIC/L21Patricia-BaleenBass StraitOrbostVIC/P55Patricia-Baleen Gas FacilityVIC/P39(V)0100kilometresT/32PT/33PBass StraitT/35PT/36PT/40PT/48PBay of Bengal0100kilometresNEC-DWN-2004/1NEC
155、-DWN-2004/2BangladeshIndiaIndiaBurmaBlock 16Block 16(Sangu)Block10Block 5Nam Con SonBasinSong HongBasin0250kilometresSouthChinaSea101-100/04 PSCKakap PSC(Indonesia)12 PSC050kilometresATP 299PATP 820PATP636PAlkinaAquitaine CAquitaine BInnaminckaTotal 66PEL 114Aquitaine AATP 783PATP 543P SATP543PATP 7
156、65PATP 752P BATP 661PWareena0100kilometresATP 685PATP 553PATP 337PATP 336P RomaATP 471P MATP 470P RDATP 471P BATP 337PATP 337PATP 470P RDATP 336PWaldegraveATP 745PATP 526PATP 592PATP 653PATP 804PATP 626P0100kilometresTasmaniaVictoriaVIC/P44VIC/RL7VIC/L22La BellaMinervaPortlandHeytesburyGas FacilityH
157、amiltonVIC/P51CasinoMt GambierPEP 160VIC/L24King IslandGeelongMelbourne0100kilometresWA-191-P(1)WA-209-PWA-8-LWA-214-P(1)WA-264-PWA-208-PWA-20-LWA-214-P(2)WA-13-LWA-15-LWA-191-P(2)TL/2WA-7-LTP/7(3)WA-1-P(1)11SL/06-7TL/7TL/4TL/3TP/2L 10TR/4WA-290-P8SL/06-7WA-1-P(2)WA-246-PIndianOceanWA-26-LWA-27-LWA-
158、33-RWA-29-LTP/7(2)WA-358-P0200kilometresNT/RL1WA-6-RWA-18-PNT/P69NT/P61WA-274-PNT/P67WA-281-PAC/L1AC/L2AC/L3JPDA 03-12WA-27-RNT/P480100kilometresNorthern TerritoryRL2DingoOL3PalmValleyOL4OL5MereenieBrewer EstateThe world of SantosEgyptKyrgyzstanIndia and BangladeshIndonesia and VietnamAmadeus BasinB
159、rowse,Timor and BonaparteCarnarvon BasinOtway BasinSorell Basin Gippsland BasinSurat/Bowen BasinsCooper/Eromanga BasinsSAN182 AW2 Text 19/3/08 1:21 PM Page 1011Santos Annual Report 2007East Java BasinJeruk,Maleo,Oyong,Tanggulangin,Wortel,WunutCarnarvon BasinBarrow,Hurricane,John Brookes,Legendre,Mut
160、ineer-Exeter,Reindeer,Stag,ThevenardSurat/Bowen BasinsFairview,Gladstone LNG,Lytton,Moonie,Roma,Scotia,WallumbillaAmadeus BasinMereenie,Palm Valley,Brewer EstateHoutman BasinGippsland BasinPatricia-Baleen,Sole,KipperOtway BasinCasino,Henry,MinervaBrowse BasinSorell BasinTimor/BonaparteKutei BasinHiu
161、 AmanPort BonythonWickham PointIndiaNE Coast BasinCooper/Eromanga BasinsMoomba,Ballera,JacksonWest Papua and Papua New GuineaHides,SE Gobe,BarikewaNam Con Son BasinChim Sao,DuaSong Hong BasinWest Natuna BasinKakap PSCKyrgyzstanFergana Basin0100kilometresPDL 1PDL 3Warim PSCPRL 5PRL 9IIIIIIIVV50kilome
162、tres0Sampang PSCJava SeaMaduraOffshore PSCNth Bali1 PSCBrantas PSC50kilometres0PopodiPSCPapalangPSCMakassar StraitDonggalaPSCKutei BasinEast Java BasinWest Papua and Papua New GuineaKey to mapsExplorationProductionProcessing and load-out facilityOil fieldGas fieldOil pipelineGas pipelineDetailed exp
163、loration maps are available on the Santos website .Jabiru-ChallisBayu-Undan,Barossa,Caldita,Elang-Kakatua Evans ShoalBangladeshBengal BasinPetrel,TernSAN182 AW2 Text 19/3/08 1:21 PM Page 1112Santos Annual Report 2007Production statistics 2007Total 2007Total 2006Field unitsmmboe Field unitsmmboeSales
164、 gas,ethane and LNG(PJ)Cooper94.716.3109.2 18.8 Surat/Bowen/Denison34.96.029.4 5.1 Amadeus13.12.212.7 2.2 Otway/Gippsland30.15.226.3 4.5 Carnarvon30.65.331.7 5.4 Bonaparte15.12.613.1 2.2 Indonesia19.43.36.8 1.2 Bangladesh1.20.20.00.0United States2.90.56.1 1.0 Total production242.041.6235.3 40.4 Tota
165、l sales volume239.441.2254.843.8Total sales revenue($million)944.1944.2 Crude oil(000 bbls)Cooper3,324.43.33,455.1 3.5 Surat/Denison60.80.166.8 0.1 Amadeus151.80.2139.3 0.1 Legendre387.10.4462.0 0.5 Thevenard391.10.4390.4 0.4 Barrow679.00.7687.50.6Stag2,337.82.32,768.9 2.8 Mutineer-Exeter3,687.83.74
166、,865.1 4.9 Elang-Kakatua76.50.1160.8 0.2 Jabiru-Challis148.60.1157.1 0.1 Indonesia418.70.4111.6 0.1 SE Gobe224.70.2267.5 0.3 United States18.80.038.6 0.0 Total production11,907.111.913,570.7 13.6 Total sales volume11,257.111.313,452.2 13.5 Total sales revenue($million)1,036.81,202.0Total 2007Total 2
167、006Field unitsmmboe Field unitsmmboeCondensate(000 bbls)Cooper1,495.11.41,618.9 1.5 Surat/Denison33.20.024.0 0.0 Amadeus87.20.158.0 0.1 Otway27.40.023.2 0.0 Carnarvon441.00.4424.6 0.4 Bonaparte1,618.41.52,384.4 2.3Bangladesh0.40.00.00.0United States65.40.1124.2 0.1 Total production3,768.13.54,657.3
168、4.4 Total sales volume3,926.03.74,623.9 4.3 Total sales revenue($million)330.1397.3LPG(000 t)Cooper165.21.4200.6 1.7 Surat/Denison2.10.00.00.0Bonaparte76.20.7106.3 0.9 Total production243.52.1306.9 2.6 Total sales volume248.62.1294.0 2.5 Total sales revenue($million)177.5206.8TotalProduction(mmboe)5
169、9.161.0Sales volume(mmboe)58.264.1Sales revenue*($million)2,488.52,750.3*Full year 2006 sales revenue has been restated to exclude an$18.8 million gain onembedded derivatives in sales contracts due to a change in statutory accountingdisclosures.SAN182 AW2 Text 19/3/08 1:21 PM Page 1213Santos Annual
170、Report 2007Reserves statistics 2007Proven plus Probable reserves(Santos share)by activitySales gas(incl.ethane&LNG)Crude oilCondensateLPGTotalPJmmbblmmbbl 000 tonnesmmboeReserves year end 20063,94975432,895819Production-242-12-4-243-59Additions551164330117Acquisitions/divestments130002Estimated rese
171、rves year end 20074,27179432,982879Proven plus Probable reserves(Santos share)by areaSales gas(incl.ethane&LNG)Crude oil CondensateLPGTotalAreaPJmmbblmmbbl000 tonnesmmboeCooper Basin78339111,560197Onshore Northern Territory11321023Offshore Northern Territory3250201,01184Eastern Queensland1,667001428
172、7Southern Australia4040539777Carnarvon Basin7683460171Papua New Guinea01001Indonesia18730035Bangladesh240004Total 4,27179432,982879Reserves(Santos share)(mmboe)Year endAcquisitions/Year end 2006ProductionAdditionsdivestments2007Proven(1P)reserves441-591003485Proven plus Probable(2P)reserves819-59117
173、28792C Contingent Resources*2,2480359-122,595*2C Contingent Resources were previously called best estimate resources.The name has been changed to be consistent with the updated SPE/WPC/AAPG/SPEE Guidelines issued in March 2007.Defining reservesSantos has in place an evaluation andreporting process t
174、hat is in line withinternational industry practice and conformswith the Petroleum Resource ManagementSystem(PRMS)published by the Society ofPetroleum Engineers(SPE),World PetroleumCouncil(WPC),the American Association ofPetroleum Geologists(AAPG)and the Societyof Petroleum Evaluation Engineers(SPEE)
175、.Reserves are defined as those quantities of petroleum which are anticipated to becommercially recovered from knownaccumulations from a given date forward.Santos reports reserves net of the petroleumrequired for processing and transportation to the customer.Reserves reported are based on,and accurat
176、ely reflect,informationcompiled by full-time employees of theCompany who have the requisitequalifications and experience prescribed by the ASX Listing Rules.Externally audited booking processIn excess of 80%of Santos year-end 2007reserves and contingent resources wereaudited by independent experts,G
177、affneyCline&Associates(conventional assets)and Netherland Sewell and Associates(coalseam gas assets).The auditors found that:Based on the outcomes of the audits ofSantos major assets and our understandingof the estimation processes employed bySantos,we are of the opinion that,inaggregate,the total v
178、olumes summarised in the Santos summary table represent areasonable estimate of Santos December 31,2007 reserve and contingent resourcesposition.SAN182 AW2 Text 19/3/08 1:21 PM Page 1314Santos Annual Report 2007LNG projectsGladstone LNG set to transform Santosthrough volume growth and margin expansi
179、onArtists impressionof the proposedGladstone LNGplant,Curtis Island,Queensland.SAN182 AW2 Text 19/3/08 1:21 PM Page 1415Santos Annual Report 2007Santos plan to build an LNG business from itseastern Australia coal seam gas resources is a transformational initiative.The$7 billion Gladstone LNG project
180、augments Santos leadership position in the domestic Australian gas market and is the leading proposal to export Queenslandgas to world markets.Gladstone LNG sits strategically with Santosother LNG initiatives in Darwin,Papua NewGuinea and,potentially,in the Browse andKutei Basins in Western Australi
181、a andIndonesia respectively.Over the past five years,the global LNGmarket has changed dramatically,with theterms of trade now much more favourable to producers.Between 2000 and 2002,contracts to sell LNG to China enabledthe development of several major projects,but at prices near historic lows.The r
182、ising prices of recent years,accompaniedby the stronger linkages of world gas and oilprices,means Santos is developing its LNGprojects at the right time.Gladstone LNG a game-changingenterpriseThe announcement in 2007 of Santos plansfor the Gladstone LNG plant represented theculmination of five years
183、 of effort in buildingthe Companys coal seam gas business.Strategic,incremental acquisitions of acreagein the Fairview,Scotia and Roma areas inQueensland and in the Gunnedah Basin inNew South Wales now see Santos with licenceareas spanning more than 30,000 squarekilometres.Certified 2P reserves in S
184、antos Queenslandcoal seam gas fields have increased to morethan 1,600 PJ.With 3P reserves plus high-side contingent resources of approximately14,500 PJ,Santos focus is on appraisaldrilling,with 600 wells planned before thefirst shipment of LNG from Gladstone in 2014.Santos has four valuable coal sea
185、m gas assetswith a total resource in the region of 5070trillion cubic feet of gas.This is enough gasto supply all of Australias domestic gasneeds for at least 100 years.It is this build-up of coal seam gas resourcesthat will enable Santos to make GladstoneLNG a reality.In 2007,Santos acquired a free
186、hold site tobuild the liquefication plant,including futureexpansions on Curtis Island in the industrialPort of Gladstone,and the project wasawarded Significant Project status by theQueensland Government.The project is on schedule to begin exportingapproximately 3 million tonnes of LNG eachyear from
187、2014.Santos sees scope to increaseproduction to 10 million tonnes per year withina few years of commencing LNG shipments.Santos expects to award contracts for pre-front-end engineering and design in April2008 and front-end engineering and designwork on Gladstone LNG by the end of 2008,enabling a fin
188、al investment decision on theproject by the end of 2009.Increased stake in Darwin LNG During 2007,Santos increased its share in the ConocoPhillips-operated Darwin LNGdevelopment from 10.6%to 11.4%as a resultof a formal redetermination process.Darwin LNG,the Companys first major LNGinvestment,which c
189、ommenced production in early 2006,has been a very successfulventure for Santos which is the onlyAustralian joint venture participant.With the ongoing appraisal of significant gas resources in the region,Santos and itspartners are progressing plans to expand theDarwin plant with a second processing t
190、rain.In the Bonaparte Basin,the Frigate Deep-1 well will be drilled during 2008,targeting gas 15 kilometres west of the Tern field.PNG LNG well progressedThe proposed PNG LNG development made very good progress in 2007 within the joint venture and in moving throughregulatory and approval processes w
191、ith the PNG Government.The joint venture,in which Santos currentlyhas a 13.8%share,anticipates front-endengineering and design will commence earlyin 2008 and a final investment decision willbe made in 2009 to enable first gas to beexported by 2013.ExxonMobil will operate the project on behalf of the
192、 joint venture.Santos strategic opportunityFavourable LNG dynamicsSantos well positionedBooming demand for LNGMultiple LNG opportunitiesLarge gas resources a prerequisiteSignificant contingent resource positions with quality assetsGladstone LNG5070 trillion cubic feet of coal seam gas potential reso
193、urce,freehold site acquiredPNG LNG Hides field critical to PNG LNGDarwin LNG expansionSantos 40%interest in 8+trillion cubic feet of resourcesSAN182 AW2 Text 19/3/08 1:21 PM Page 1516Santos Annual Report 2007Eastern Australia gasUnique ability to benefit from changingmarket dynamics,including LNG ex
194、portInspection ofCompressor Site 2,Fairview coal seam gas field,easternQueensland.SAN182 AW2 Text 19/3/08 1:22 PM Page 1617Santos Annual Report 2007Recent years have seen a significanttransformation of the eastern Australia gas sector,including:the near-term prospect of production andexport of LNG f
195、rom Australias east coast;the emergence of coal seam gas as alarge-scale,credible and reliable sourceof supply;andnew pipeline interconnections whichhave improved market flexibility.Along with these changes,domestic gasdemand is forecast to increase rapidly.Gas is becoming the natural fuel of choice
196、 for the next generation of power stations in eastern Australia as concerns grow overcarbon emissions and water use associatedwith coal-fired power generation.Natural gas fired power stations typicallyemit up to 60%less carbon dioxide than a coal-fired power generator.In addition,a wet coal fired po
197、wer generator uses 200times the amount of water than an equivalentdry gas fired power generator.Santos is in a strong competitive position to be a prime beneficiary of these changes.The Company has a high quality portfolio of strategically important assets andinfrastructure,and is a low cost produce
198、r.It has large uncontracted gas resources in an environment of rising gas prices.In coal seam gas,Santos Fairview field ratesas one of the worlds best coal seam assetsand the Company is continuing to build on its leading position in this sector.East coast LNG offers high-value exportSantos proposed
199、Gladstone LNG project willforever change the dynamics of the easternAustralia gas market by providing an exportalternative for local gas production.For some time,Santos has expressed the viewthat the low gas prices in eastern Australiaare not sustainable.There remains a stark difference betweenAsian
200、 LNG prices and Santos average realised gas price,despite eastern Australia gas prices increasing by approximately 40%over four years.There is a significant incentive for gasproducers to sell into the high value LNGmarket,while continuing to provide a stablesupply of gas domestically.Gladstone LNGwi
201、ll provide Santos with this opportunity.Gas contracts built supplySantos took several important steps in 2007to strengthen its position in the easternAustralia gas market.The South Australian Cooper Basin Producersextended their current contract to supplyethane to Qenos.The extension means theproduc
202、ers will supply up to an additional 56 PJ of ethane to Qenos Botany plant inSydney from late 2007 until the beginning of 2013.Santos also executed conditional contractswith Nexus Energy to process and purchaseup to 350 PJ of gas and associated liquidsfrom the Longtom field in the offshoreGippsland B
203、asin,Victoria.Gas production and processing is estimated to start by early 2009.Together with its partners,ExxonMobil andBHP Billiton,Santos approved the Kipper gasproject in Bass Strait for development.Firstgas production is targeted for the first half of 2011,with gross gas production ratescommenc
204、ing at approximately 75 TJ per day.Design and procurement of equipment willcommence in 2008 with offshore constructionand installation beginning in 2010.Followingstart-up,Santos will take 70%of the gasproduction,which is twice its working interest,for four years.Santos,on behalf of the VIC/P44 joint
205、venture,also approved the development of the Henry gas project,offshore PortCampbell in Victoria.Henry will be developed using existinginfrastructure associated with the Casino gas field which started production in early 2006.Development of Henry will enable additionalgas sales to TRUenergy under an
206、 existing gassales agreement for processing at its Ionafacility.Production will start in 2009.The Henry development will involve thedrilling of one development well,Henry-2.During 2008,the joint venture will also testthe gas potential of the Pecten High area,with two exploration wells,Pecten East-1
207、and Netherby-1.Santos strategic opportunityStrong market growthSantos is well positionedGas demand growing stronglyLarge uncontracted gas position,demonstrated contracting capabilityGas is a low carbon emission fuelIncreasing gas demand and priceCoal seam gas is emerging to fill marketEstablished le
208、ader in coal seam gasdemand and provide export mechanismOtway Basin now a major gas Largest acreage operator in Otway/Sorell Basinsproducing areaSAN182 AW2 Text 19/3/08 1:22 PM Page 1718Santos Annual Report 2007Cooper Basin oilLarge-scale oil exploitation project,withextensive acreage,infrastructure
209、 and know-howInstallation ofenvironmentally-friendly glass-reinforced epoxyflowlines,CooperBasin Oil project.SAN182 AW2 Text 19/3/08 1:22 PM Page 1819Santos Annual Report 2007The Cooper Basin Oil project Santosinitiative to increase oil production fromAustralias richest onshore hydrocarbonprovince r
210、emains a significant undertaking,and one which will underpin the Companysoil production rates for many years.Drilling and production resultsSantos intensive drilling program continuedin 2007 with 132 wells drilled compared to108 in 2006.The well success rate of 73%maintained a strike rate since laun
211、ching the project of around 75%a better performance than any other company operating in the CooperBasin.This enabled Santos to increase 2Preserves by 8 mmbbl.Initial online production rates fromsuccessful wells averaged a gross 160 barrelsper day,meeting expectations and takingtotal oil production s
212、ince the project began to approximately 7 mmbbl Santos share.The Cooper Basin Oil project has the advantageof great flexibility as Santos has the equipment,people,planning systems and contractorrelationships to deploy resources quickly andeffectively to adjust the drilling scheduleaccording to resul
213、ts.Challenges metSantos met considerable challenges during2007.Heavy rains in the first half of the yearlimited the movement of rigs and constructioncrews.Associated cooler weather also causedproblems in the transportation by pipeline of high pour-point(thick viscous)oil fromsome wells.The waxing of
214、 this oil was overcome by the optimisation of pour-point depressantsand modifications to the Limestone Creekproduction hub to increase the temperatureof the oil and split out the higher pour-pointoil for separate transportation by truck.Another impediment was the closure of the Moonie to Brisbane pi
215、peline after a leakoccurred in suburban Brisbane in late July.In addition to the immediate emergencyresponse and ongoing management at the site of the leak,Santos responded byarranging an intensive trucking program and the installation of additional truckloading facilities that saw about 6,000barrel
216、s of oil per day transported fromMoonie to Brisbane and Moomba by road.A longer-term solution will be theconstruction of the Jackson to Moombapipeline,which is expected to be completed by mid 2008.Engineering work to expandhandling facilities at Moomba and PortBonython in South Australia where oil i
217、s shipped to export and domestic markets is well progressed.Change in focus for 2008A key focus for 2008 is to build a largerinventory of drilling opportunities to provide more flexibility,and to continue to optimise the portfolio.An area of significant potential is increasedoil recovery through sec
218、ondary and tertiaryenhanced recovery techniques.While thesetechniques are relatively new to onshoreAustralia,they are well-proven technologiesin other parts of the world.Secondary recovery involves injecting waterinto wells to increase the pressure of the field and push the oil towards the producing
219、wells.This is taking place in the Mulberry,Endeavour,Gimboola,Talgeberry,Cranstounand Merrimelia fields,and initial results havebeen positive.Santos is also assessing the use of carbondioxide as an injection agent for enhanced oil recovery at the Tirrawarra field,about 60 kilometres north-west of Mo
220、omba.Carbondioxide has been used as an injection agentfor more than 30 years in the United Statesbut never in Australia.Using carbon dioxide in this way also offersthe exciting potential to combat climatechange.The injection of carbon dioxidecaptured from emissions at the Moomba gas processing plant
221、 into the Tirrawarra field is included in the first phase of Santosproposed Moomba Carbon Storage project.Santos strategic opportunityHigh value opportunity Santos competitive advantageOil prices higher for longerUsing modern rigs and proven technology to increase recovery factorsAbility to execute
222、low-cost programUnique capabilities,knowledge,infrastructure and short cycle timeOver 700 mmbbl original oil in placeLargest onshore Australian oil acreage:more than 7.4 million acresSAN182 AW2 Text 19/3/08 1:22 PM Page 1920Santos Annual Report 2007Western Australia oil and gasBenefits realised from
223、 large gas reserves as demand and prices increase Mutineer-Exeterfloating production,storage and offtakevessel,offshoreWestern Australia.SAN182 AW2 Text 19/3/08 1:22 PM Page 2021Santos Annual Report 2007The increasing demand for natural gas to power the Western Australia resourcesindustry is strongl
224、y supported by Santos,and the Company is benefiting as the trueeconomic and environmental value of thisnatural resource is being realised.The strength of the Western Australiaeconomy has underpinned growth in the states gas industry in recent years.Western Australia has benefited for manyyears from
225、a major investment in LNGinfrastructure and associated domestic gas supply.However,further development of domestic supply has fallen behind therapidly increasing demand to meet the states booming economy.With historically very low prices based on LNG project domestic gas obligations,untilrecently th
226、ere was no incentive for furtherexploration and development of gas fordomestic consumption.Without investmentin exploration and development,long-term domestic gas supply was under threat.This dynamic is now changing as increases in domestic prices signal the opportunity for further investment.More g
227、as projects are now being developed to deliver gas to the domestic market.Santos most recent contract negotiationsconcluded at more than$7.50 per gigajoule,and the price trend is expected to increase in 2008 as demand continues to escalatedespite growing prices.Reindeer development advancedThis new
228、pricing paradigm is enabling the development of the Reindeer gas field to supply additional gas to the WesternAustralia market.Front-end engineering and design studies for the development of Reindeer in theCarnarvon Basin,offshore from Dampier,were completed in late 2007.Project sanctionis anticipat
229、ed in the first quarter of 2008.A tender process for the sale of the gas was concluded late in 2007.This innovativeapproach yielded important insights into theWestern Australia market and provided allpotential buyers with an equal and efficientopportunity to negotiate for the purchase of new gas sup
230、plies.This process resulted in the selection of a number of parties with whom gas salesnegotiations are progressing.A furthersignificant increase in prices above 2007levels has been obtained,underpinning the investment required to bring projectssuch as Reindeer online.Mutineer-Exeter oil production
231、Production from Mutineer-Exeter,Santosmajor oil-producing asset outside the CooperBasin,slipped to 3.7 mmbbl in 2007,from 4.9 mmbbl in 2006.Production rates from the field were impactedby workover activity,natural field declineand,from mid December,electrical damageon the floating production,storage
232、 andofftake vessel which rendered all subseapumps inoperable.Temporary repairs to the vessel will limitMutineer-Exeter production in the firstquarter of 2008.A permanent repair isscheduled for the first quarter of 2009.Other Western Australia oil production at Stag,Legendre,Thevenard and Barrowtotal
233、led 3.8 mmbbl,down from 4.3 mmbbl in 2006,again due to workover activity and natural field decline.2008 exploration Three exploration wells are scheduled to be drilled in Western Australia in 2008.The Ichthys North-1 well in the Browse Basin will be drilled during the third quarter.This is an exciti
234、ng prospect targeted atproving a gas accumulation to the immediatenorth of the Inpex-operated Ichthys fieldthat is currently under development planning.The Johnson-1 well will be drilled,targeting oil in the Carnarvon Basin,and Santos will be partnering in the ENI-operated Charon-1well,also targetin
235、g oil,in the Houtman Basin.In addition,two near-field oil explorationwells are scheduled to be drilled on theAdams and Fletcher North prospects,near the Mutineer-Exeter field in the WA-191-Ppermit in the Carnarvon Basin.Santos strategic opportunityOil upside,gas prices risingSantos well positionedDe
236、mand for gas remains highUncontracted John Brookes reserves;Reindeer development opportunityFurther growth expected at higher pricesWestern Australia gas market has moved to A$7.50+per thousand cubic feetProven hydrocarbon systemsMultiple oil exploration and appraisal targets,short cycle time opport
237、unitiesSAN182 AW2 Text 19/3/08 1:22 PM Page 2122Santos Annual Report 2007Asian growthEstablished production in Indonesia a platformfor broader growth in Asia Oyong oil wellheadand productionbarge,offshore East Java.SAN182 AW2 Text 19/3/08 1:22 PM Page 2223Santos Annual Report 2007Santos is uniquely
238、positioned to become aleading energy company in South East Asia.The Companys competitive advantages inthis region stem from deep knowledge of thehydrocarbon basins and systems,regionalexperience and extensive industry andpolitical networks.Santos success in Asia will be judged byachievements in two
239、core areas Indonesiaand Vietnam and the emerging areas ofIndia and Bangladesh.Indonesia a major producerIndonesia is a major focus for Santos,reflected in the fact that the Jakarta office is the Companys largest outside Australia.Oil production from the Oyong field in the Sampang PSC,70 kilometres e
240、ast of Surabaya,started in September 2007,with production in line with expectations at8,000 barrels of oil per day and cumulativeproduction of 1 mmbbl.Phase 2 of Oyong was approved for developmentin December 2007 and will develop the gasreserves.First gas production is anticipatedin the third quarte
241、r of 2009 with gas to besold to PT Indonesia Power.The Wortel gas field,discovered in 2006 andlocated 7 kilometres west of Oyong,has thepotential to be the third phase for Oyong.An infill 2D seismic survey has been completedto assist with the appraisal of the field.Aninvestment decision is anticipat
242、ed in 2009depending upon the seismic results.Production from the Maleo field hasstabilised but continues to be impacted by capacity restrictions in the Pertamina-operated East Java Gas Pipeline following arupture of this line during November 2006.However,gross production rates from Maleohave increas
243、ed throughout the year and wererunning at approximately 80 TJ/day at theend of 2007.Progress made in VietnamSantos has made good progress since firstentering Vietnam in 2006.The Company isprogressing the Chim Sao(Blackbird)and Duaoil discoveries partnering with Premier Oiland Delek Energy towards a
244、project sanctiondecision in 2008.The joint venture has already identified a recoverable resource of approximately 80 mmbbl.First oil production is expected in 2010.A six-month drilling program during 2008will appraise the Chim Sao field and test two further exploration prospects.Further north,in the
245、 Song Hong Basin,Santos is the operator in a joint venture with Singapore Petroleum.The joint venture acquired 3D seismic during 2007,is progressing with interpretation andexpects to begin drilling in 2009.As a further sign of Santos confidence inVietnam,the Company opened an office inHanoi in the f
246、irst quarter of 2008.Santosinvestment in the country is part of thegrowing economic and trade ties betweenAustralia and Vietnam.Emerging areas in India and BangladeshDuring February 2007,Santos was awarded a 100%working interest and operatorship of two blocks covering approximately 16,500square kilo
247、metres in the northern Bay ofBengal,offshore India.Several large discoveries have already been made just west of the acreage acquiredby Santos.Santos has committed to an eight-year,US$70 million work programcovering the two offshore deep waterexploration licences.The acquisition of 2D seismic over t
248、he blocksis well advanced and due for completion inthe second quarter of 2008.This will befollowed by targeted 3D seismic,with drillingexpected in 2010.As an extension of the Companys Bay of Bengal play,Santos acquired various assets in Bangladesh in October 2007,including a 37.5%interest in the San
249、gu gas field and a portfolio of explorationacreage from Cairn Energy.The exploration drilling of the Magnama-1well encountered approximately 2040 metresof gas-charged sands.Further evaluation will be required beforemaking an investment decision.The nearbyHatia well was spudded in early 2008.Both wel
250、ls are close to Sangu productionfacilities which have approximately 400mmscf/d of spare capacity to sell gas to the Bangladesh market.Santos strategic opportunityHigh growth potential Santos has a quality portfolioFocused long-term vision Strategic focus on Asiarequired for successExploration,develo
251、pment and Maleo gas and Oyong oil fields producing;Oyong gas project start-up in first half 2009;production in IndonesiaKutei explorationExploration success in VietnamChim Sao,Dua oil discoveries,Swan gas field,active exploration programQuality acreage capturedIndia and Bangladesh entries;Kyrgyzstan
252、 and Vietnam acreage extensionsSAN182 AW2 Text 19/3/08 1:22 PM Page 2324Santos Annual Report 2007SustainabilityBeing a leader in sustainability gives a perceptible advantageEmployee kitchen facilities at Santos Centre.SAN182 AW2 Text 19/3/08 1:22 PM Page 2425Santos Annual Report 2007Sustainability c
253、reates long-term shareholdervalue by realising the opportunities andmanaging risks derived from social,environmental and economic factors.Santos overall sustainability performanceimproved in 2007 with many achievementsboth on the ground and in the implementationof policies and systems.Recognition of
254、 Santos sustainabilityperformance includes listings on the:Australian SAM Sustainability Index(AuSSI);Reputex Social Responsibility Index,withSantos achieving a Reputex A rating;Goldman Sachs JBWere ASX ClimateDisclosure Leadership Index;and HorwathUniversity of Newcastle five-star rating for corpor
255、ate governance.The Australian Petroleum Production andExploration Association also recognisedSantos five-year research partnership intothe relationship between whales and seismicactivity by awarding the Company its 2007Environment Award.The Company is committed to integrating the principles of susta
256、inability into its day-to-day business,measuring its progresstowards this goal and comprehensivelyreporting this progress.Systems and policies integratedTo promote high standards of corporategovernance and ethical business conduct,Santos has a clear set of values,policies and procedures to guide the
257、 actions of theCompany and employees in all the areas of the business.This includes an integrated Code of Conduct which prescribes that,in addition to compliance with all applicable legalrequirements,all employees are expected toadopt appropriate standards of professionaland business conduct in thei
258、r dealings onbehalf of Santos.The table to the right summarises the areascovered by these systems and policies.One of Santos systems is a comprehensiveEnvironment,Health and Safety ManagementSystem that accommodates all aspects of the Companys environment,health andsafety requirements and is the fou
259、ndation on which assessments are conducted andimprovements made.The Environment,Health and SafetyManagement System describes therequirements for effective environmental and safety practice and prescribes how the Company complies with relevantinternational and Australian standards and regulatory requ
260、irements.In 2007,Santos compiled its variousmanagement tools and processes into aunified system called How Santos Works to formally document these managementsystems in an integrated manner.How Santos Works has been created to ensureSantos operational systems and decision-making processes are capable
261、 of achieving its corporate strategy.Safety performance improvedSantos improved safety in 2007 through the successful implementation of newstandards on process safety and achieving a reduction in the rate of injuries.Santos systems and policies include:How Santos WorksCode of ConductEnvironment,Heal
262、th and SafetyManagement SystemBusiness conductAnti-corruptionCompany resourcesConfidentialityConflict of interestFinancial governanceFinancial management and accountingGifts and benefitsGuidelines for dealing in securitiesPolitical affiliationPrivacyRecruitment and selectionReporting misconductRisk
263、managementShareholder communication and market disclosureEnvironment and socialEnvironmentGreenhouseHealth and wellbeingHuman rightsSafety Workplace and employmentConditions of employmentEqual opportunityInternet and electronic communicationsIssue resolutionLeave Performance managementRemuneration a
264、nd benefitsTraining and developmentAll Santos systems and policies are published on the Companys intranet(internal website).A major achievement during 2007 was thepublication of the Human Rights Policy and How Santos Works following an extensivereview process.SantosSustainability Report 2007 provide
265、smore information about the Companyssustainability management and performance.AdvantageSustainability Report 2007Inside:Scorecard of our sustainability performance 7Drilling innovations reduce water use 15Community development in Indonesia 24Call for a low emission technology strategy 37SAN182 AW2 T
266、ext 19/3/08 1:22 PM Page 2526Santos Annual Report 2007This performance improvement in 2007 wasan excellent achievement and a reflection of the hard work put in by many people.There were an unacceptably high number of safety incidents involving contractors in 2006.Consequently Santos worked withcontr
267、actor companies in 2007 to arrest thisconcerning trend.As a result,contractorsafety performance improved by 25%.Hand and finger injuries continued to be the major injury type,accounting for up tohalf of all injuries.To address this,Santoslaunched an awareness program in 2007including a hand hazard i
268、dentification andglove selection program which aims to reducethe number of incidents and the severity ofthe injury.Fatigue has been identified as another causeof many serious workplace accidents.Santosestablished a joint employee/employerworking group to review fatigue data,rosters and work patterns
269、,and stewardongoing initiatives,such as creating anemployee information DVD.A defensive driving program,entitled SafeDrive,was also launched in 2007.Targetingall employees and their families,the programshowed people how to drive defensively toprevent vehicle incidents.Safe Drive was supported by the
270、 installationof in-vehicle monitoring systems for allvehicles to provide feedback to help changeand improve driving behaviour.Santos won four of the six categories at theSelf Insurers of South Australia 2007 safetyawards and two awards at the Safe Work SAawards,including Employer of the Year.Develop
271、ing leadershipSantos approach to leadership is central to developing capability,fostering anachievement-oriented culture andstrengthening employee commitment.The Company works to develop leadershipskills to meet future challenges such asindustry consolidation,strong competitionfor skills in the mark
272、etplace,expectations of recruits,new technology,increasinggovernance and public reporting issues,andrapidly changing workplace demographics.The Santos Board oversees the continuity of executive leadership for the organisationthrough succession planning for key roles.Ongoing development of leadership
273、 potentialat other levels of the organisation ensureslong-term depth of leadership capacity.Structured approach builds capabilitiesThe Santos Capability Framework,which sets out an organisations capabilities and competencies,was further developedduring 2007.The framework will underpin all humanresou
274、rces initiatives from recruitment toemployee development,enabling individualsand their managers to focus developmentdiscussions on the most importantcapabilities and competencies.The process of applying the Capability Frameworkbegan in 2007 through executive leadershipassessments and tailored develo
275、pment plans.Further implementation of this approach will occur in 2008,and leadership andmanagement training programs also will bedelivered from the core learning curriculum.Santos graduate program is also an integralpart of the Companys capability developmentstrategy.The Company has an active gradu
276、ateprogram,designed to attract and retain the best graduates by offering them careerpath opportunities.Each year,approximately 15 engineering and geoscience university graduates areselected for the three-year program.They are given training and career developmentopportunities while working in a stru
277、cturedjob rotation program.Training for the futureDevelopment and training at Santosaddresses specific skills for individuals and learning that the Company considers core to its business.Competency-based training was an importanttraining focus in 2007 for field operations.This training is externally
278、 accredited underthe Australian Qualifications TrainingFramework and includes on-the-jobcompetency and skills assessment foroperators and supervisors.During 2007,Santos issued 37 level III and IV certificates and engaged 12apprentices.Santos also received theCommonwealth Minister for Vocational Tota
279、l recordable case frequency rateRecordable injuries per million hours worked0369121520062005200420032007ContractorCombinedEmployeeInjury rate as measured by total recordable casefrequency rate fell by 17%to 5.3 in 2007 andwas also better than Santos2007 target by 9%.The majority of Santosemployees a
280、re located in South Australia due to the significantCooper Basin operations and the Adelaide-based corporate and business services thatsupport Santosassets in Australia and overseas.At 31 December 2007,Santos had 1,774employees(full-time equivalent),a 6%increaseon the previous year due to the ramp-u
281、p of theFairview and Gladstone LNG activities.Some372 people were employed under award-basedagreements and in 2007 there was no time lostdue to industrial stoppage.Sustainability(continued)EmployeeFull-time1,665Part-time65Graduate program65Contractors250External service providers1,6393,684Workforce
282、composition 2007Head countSAN182 AW2 Text 19/3/08 1:22 PM Page 2627Santos Annual Report 2007and Further Educations Runner-Up Award for Excellence for Employers of AustralianApprentices for the Adelaide Region.Creating the culture for successDuring 2007,Santos continued the practiceof having the Mana
283、ging Director and seniorleadership conduct face-to-face communicationsessions to inform employees about businessdirection,strategy and performance.Building an achievement-oriented culture at Santos is an important objective.Themajority of employees participate in theannual performance review process
284、.Half of the annual performance review assessesfor behaviour that is consistent with Santosvalues(see inside front cover).The performance review provides valuabletwo-way communication between employeesand their managers to assess performanceagainst agreed objectives.It also provides aforum to identi
285、fy professional developmentneeds,career planning and future opportunities.To improve the quality of this exchange,a number of programs were developed andpresented to leaders during 2007 to developskills in coaching for performance and givingand receiving feedback.These programs willcontinue to be im
286、plemented in 2008.Growing employee commitmentSantos measures employee commitmentevery two years,using the intervening year toimplement findings from these surveys.The2006 survey,conducted by an internationalresearch organisation,showed that employeecommitment was positive and had improved.Santos con
287、tinued to implement programsduring 2007 to improve employee commitment.Change management was identified viaemployee feedback as an area for furtherimprovement and during 2007 Santosdeveloped tools and education materials for the effective management of change.Santos has recognised the increasingimpo
288、rtance of flexible work options inmaintaining a diverse,adaptable and highly committed workforce.Therefore a range of additional work/life policies andtools were developed in 2007.The Queensland Resources Council awardedSantos the 2007 High Achievement ResourcesAward for Women,Best Company Initiativ
289、e.The award recognised Santos policies andpractices that have attracted and retainedwomen in its coal seam gas business.Outstanding results from health programsSantos has an active program to manage the health and wellbeing of personnel bycreating an environment where personnel are educated and moti
290、vated to improve their health,wellbeing and fitness for work.In 2007,the health and wellbeing programfocused on nutrition,health and weight loss.Seminars on healthy eating,losingweight,exercise and understanding healthfactors such as blood pressure,cholesteroland weight were held in offices and the
291、field locations.This program is achieving some outstandingresults for employees and contractors withparticipation rates continually rising.The use of drugs both legal and illegal andalcohol,when used in the workplace,representsan unacceptable health and safety risk.The Company has in place a compreh
292、ensivedrug and alcohol testing program supportedby a confidential rehabilitation andmanagement program for people who breach this policy.To support this position,and help employeesand contractors understand the consequencesof drugs and alcohol,Santos ran a company-wide awareness program during 2007
293、toencourage healthy lifestyle practices.Santos employees and their families haveaccess to confidential counselling via theSantos Employee Assistance Program.Psychological support is provided for a rangeof issues including relationship difficulties,stress,and drug and alcohol problems.New head office
294、 exemplifies sustainabilitySantos relocated to a new Adelaide headoffice during 2007 in a move that is atangible expression of the Companyscommitment to sustainability.The new Santos Centre provides a safe,environmentally-responsible workplace thathelps employees work effectively together.It also su
295、pports the cultural change that has occurred over recent years with a designthat reinforces Santos values.Voluntary employee turnover is relatively stablein a climate where worldwide demand for skilledresources is rapidly increasing.Voluntary employee turnover%024681020062005200420032007Employees pa
296、rticipated in more than 105,000hours of training in 2007.Training expendituretotalled$4.35 million and$120,000 was spentto support independent tertiary study throughSantosstudy assistance program.Santosgender profile reflects the predominantlymale workforce in trades,engineering andscience.The Compa
297、ny is involved in programs to improve gender balance;for example,theGeoscience Pathways project which encouragesschool students to consider careers in thisdiscipline.CategoryTotalAverage employeestraininghours peremployeeStrategic leader1711.4Functional leader7810.3Team leader21025.9Senior technical
298、 specialist10813.3Technical specialist36429.7Team member1,00985.3Workforce training 2007SAN182 AW2 Text 19/3/08 1:22 PM Page 2728Santos Annual Report 2007Santos Centre met its objective of being asatisfying and productive workplace becauseit grew out of the ideas and aspirations ofSantos people.A co
299、mprehensiveconsultation process resulted in the finaldesign which reflects,in small and largeways,the input of hundreds of employees.As a condition of its lease with the buildingsowners,Santos prescribed that the basebuilding design had to achieve at least a five-star Green Star rating by the Green
300、BuildingCouncil of Australia.This rating was achieved,with the buildingachieving five-star Green Star ratings for theOffice Design and Office Design As Builtrating criteria.Santos is seeking a five-star Green Star ratingfor the Office Interiors criteria for the fit-out of the building.The rating is
301、expected to be awarded in May 2008.These ratings put Santos Centres greencredentials ahead of most commercialbuildings in Australia.The benefits of a green building include better indoor airquality,reduced energy use and greenhousegas emissions,reduced water consumptionand improved operating costs.E
302、xamples of Santos Centres sustainablebuilding design include:90%of rubber floor surfaces are madefrom recycled car tyres;85-year-old timber,recycled from aQueensland railway bridge,in flooring;2,800 plants to absorb carbon dioxideand release oxygen;automatic louvres allow natural light while reducin
303、g energy demand for cooling;motion detection controls for lights inmeeting rooms and for after hours;andon-site employee gymnasium.Continuous improvement makes an impactFollowing the successful pilot of the CompanysContinuous Improvement Framework,Santosestablished this process throughout theorganis
304、ation in 2007.Continuous improvement provides a processthat enables Santos to identify better ways to do things while building the capability ofemployees to make sustainable changes thatcontribute to business efficiency and growth.Santos has trained more than 100 employeesthroughout the Company to u
305、se the ContinuousImprovement Framework and has developed asuite of projects that have the potential todeliver significant benefits.Oil spill managementOil spill management and prevention remainsa high priority for Santos.Disappointingly,Santos had four significantoil spills in 2007:the Alwyn#1 flowl
306、ine(15 m3);Moonie to Brisbane oil pipeline(Moonie East,50 m3);Moonie to Brisbane oil pipeline(Algester,400 m3);Jackson Southoil flowline(24 m3);and one minor spill atKooroopa North#3(9.2 m3).The management and clean-up of these spillswere undertaken immediately and thoroughlyto minimise the impact o
307、n the environmentand community.For example,the oil spill in the Brisbanesuburb of Algester was detected by Santosautomatic monitoring system.When the leaksite was identified,the section of pipeline inthe vicinity of the incident was furtherisolated to minimise the spill.Santos worked closely with em
308、ergencyservices and the Queensland EnvironmentalProtection Authority to contain the oil andsupport the affected residents.In the first 48 hours after the spill,themajority of surface oil was recovered andstormwater drains cleaned.Clean-upactivities were continuing at the time thisreport was publishe
309、d to ensure the area isfully rehabilitated.Santos is concerned about the impact to the environment and community as a result of these oil spills and will diligently pursueprograms to remediate spill sites and preventfurther spills.In 2007 Santos undertook an oil spillprevention management review to
310、analysethe number and severity of uncontained spills and assess Santos pipeline integritymanagement programs.The review endorsed the managementprogram and recommended that an audit program be established to assessMore than 250 employees joined weight reduction programs.Results of health checks indic
311、ated76%of staff who had joined weightloss programs had lost or maintainedweight.All Santos sites installed new gymfacilities and/or equipment.19%increase in voluntary healthchecks at all Santos sites.Health expo and informationseminars were held on weight loss,fitness,healthy eating and stressmanage
312、ment.Several health information programswere created for employees families.$10,000 was raised for the JuvenileDiabetes Research Foundation aspart of employees Walk the MoombaPipeline competition.Santos programs helped employees toachieve and maintain a healthy lifestyleSustainability(continued)SAN1
313、82 AW2 Text 19/3/08 1:22 PM Page 2829Santos Annual Report 2007conformance against procedures and the effectiveness of the standards andprograms in place in the field.Waste recycling improvedSantos works to continuously improve itswaste management.In 2007 there was anincreased focus on quantifying wa
314、ste streamsso that future improvements can beaccurately measured.In addition to traditional camp-based wastemanagement,during 2007 Santos focused on reducing oil sludge production at itssource by replacing open sludge pits withsludge storage tanks at its south-westQueensland oil fields.While environ
315、mental factors drove theinitiative,an added bonus was the reducedcosts because there was less waste material to be transported and there were additionalprofits for the Company by returning the hydrocarbons to the system.The new program has been so successful it has reduced the volume of sludge being
316、transported by 90%and eliminated the need for the sludge disposal pond at Jackson.Santos is now planning to install sludge tanksat further operational sites throughout theCooper Basin.Climate change strategies pursuedClimate change is an unprecedented globalissue requiring significant resources to m
317、eet the complex environmental,energy,economic and political challenges.As a global stakeholder in the energybusiness,Santos recognises that one of itsmost important environmental responsibilitiesis to pursue strategies that address the issueof greenhouse gas emissions.Natural gas will play a pivotal
318、 role in helpingAustralias economy move to a cleaner energyportfolio.Natural gas has approximately halfthe greenhouse intensity and uses only aminute fraction of the water that coal-firedelectricity requires.Emissions reductions on trackSantos is pursuing an emission intensityreduction target of 20%
319、by 2008,from 2002 levels(greenhouse emissions/unit of production).Greenhouse gas and energy efficiency hazard standards under the Environment,Health and Safety Management Systemprovide direction to Santos operations for the measurement and managementof emissions and energy.Santos continues to delive
320、r energy efficiencyimprovements with a number of projectsidentified in 2007.An example of this is the Moomba Gas Recovery project which will divert gas from flaring.Santos also continues to participate in the Yellowbank Gas Flare project where,inpartnership with Origin Energy,credits wereverified on
321、 the Greenhouse Friendly Register.Australian Business&Climate GroupDuring 2007,a group comprising Santos andeight other leading companies called for anurgent strategy on low emission technologyto help reduce greenhouse gas emissions.The Australian Business&Climate Group said that urgent development
322、of a nationallow emission technology strategy is requiredto complement an Australian emissionstrading scheme.In the report,Stepping Up:Accelerating the Deployment of Low Emission Technologyin Australia,the companies collaborated to specifically review and recommendmechanisms needed to drive the deve
323、lopmentof transformational technologies critical iffuture emissions targets are to be met thelow emission technology strategy.The report and more information about the group are at the .Research and developmentSantos spent$8.8 million on research anddevelopment activities during 2007,withmajor proje
324、cts investigating new techniquesfor fracture stimulation,coal seam gasproduction and exploiting possible andcontingent hydrocarbon resources.Contributing to community wellbeingSantos has formed relationships with themany communities in which it has operationsand recognises its responsibility to cont
325、ributeto the social fabric of those communities.This is achieved in part through the sponsorshipand donations program and in 2007 Santoscontributed$3.8 million to 170 events andorganisations in Australia,Indonesia,PapuaNew Guinea and the United States.Lytton spill effect Moonie East/Algester spills
326、effectOil spill volumesm3200620052004200320070500100015002000Santos had four significant oil spills during 2007.Pipeline spills accounted for 96%of oil spillsduring 2007,with the remainder being the resultof 66 relatively minor incidents,typically fromleaks from small hoses,pumps and valves.Australi
327、aUnited StatesPNGIndonesiaSantos share greenhouse gas emissionsMillion tonnes CO2-e3.53.63.73.83.94.04.14.24.34.42004200320052006Santos reports its total greenhouse emissionsand emissions intensity mid-year as a ratio ofgreenhouse emissions per unit of production,and is on track to meet its target o
328、f 20%intensity reduction in the period 200208.Santos joined eight other leading companies,known as the Australian Business&ClimateGroup,to publish a report calling for an urgentstrategy on low emission technology.SAN182 AW2 Text 19/3/08 1:22 PM Page 2930Santos Annual Report 2007Through this program,
329、Santos providessupport for community-based programs,organisations and events that are valued by members of those communities,reflecteach communitys specific socioeconomic and cultural circumstances,and sharecommon values and priorities with Santos.An important part of Santos sponsorshipprogram is th
330、e Santos Community Fund,which provides financial and in-kind supportto organisations that benefit the communityin the areas of health,the environment andbuilding social capacity.The fund brings together all thecontributions Santos makes to community-based organisations and also providesadditional su
331、pport to Santos employees whovolunteer their own time and resources toimprove the community.Santos made contributions to 24 organisationsthrough this fund during 2007,including theChildrens Medical Research Centre,DeafBlindAssociation,Juvenile Diabetes ResearchFoundation and Queensland Cancer Fund.S
332、antos longest-standing community supportprogram is in the Cooper Basin whichstraddles the South AustraliaQueenslandborder.Santos participates in and supportsevents such as the Cooper Cup CricketChallenge and the Outback Car Trek thatbenefit the largely landholder population.The combined efforts of S
333、antos,itsemployees and contractors,and the CooperBasin community raised$100,000 in 2007 forthe Royal Flying Doctor Service,an essentialservice for outback communities.The Yard Dogs Association,a volunteer groupof Cooper Basin employees and contractors,raised$70,000 in 2007 for Camp Quality,anorganisation that supports young people andtheir families living with cancer.Structured approach to stakeho
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