Santos Limited (STO) Earnings Call Transcript & Summary

Well, good morning, ladies and gentlemen, fellow shareholders, and welcome to the 2022 Annual General Meeting of Santos Limited. My name is Keith Spence. Before we commence the business of the meeting, I'd ask you to please familiarize yourselves with the evacuation procedures shown on the screens behind me. So it's a pleasure to be able to welcome so many shareholders to the Adelaide town hall today for our first AGM since 2019 where we've been able to have shareholders present in person. This year, due to the ongoing impact of COVID-19, we're also offering shareholders the ability to attend and participate in the meeting online, and I welcome those of you who are joining us remotely. Every effort has been made to ensure that the meeting runs smoothly for our shareholders, whether here in person or online. We have representatives of Computershare and Lumi here in the room to provide assistance. If you're experiencing any difficulties regarding the online platform, please refer to the Annual General Meeting online user guide on the AGM page of our website, www.santos.com, or call the number shown on the slide. A recording of the webcast will be made available on our website after the meeting. I confirm that a quorum is present, and I now formally declare the meeting open. I begin by acknowledging the traditional owners on the land that we are meeting on, the Kaurna people. I pay my respects to their elders, past, present and emerging. Others participating in the meeting are doing so from other ancestral lands, and I also pay my respects to those aboriginal peoples and their elders. I acknowledge the traditional owners and indigenous people everywhere we operate, and thank them for their involvement in our industry. Let me commence our business for today with some introductions. Members of the Santos Board joining us here today, from my far left, our independent non-executive directors: Eileen Doyle; Musje Werror; Vanessa Guthrie; Peter Hearl; and Yasmin Allen. And seated immediately to my left is our Managing Director and Chief Executive Officer, Kevin Gallagher. Next to me on my right is Amanda Devonish, our Company Secretary. And on Amanda's right, our non-executive Directors, Hock Goh; Janine McArdle; and Guy Cowan. Also present on stage on my far right is Mike Utsler, who the Board has nominated for election as a non-executive Director from the conclusion of today's meeting. Eileen and Musje were appointed to the Santos Board in December last year, and they're attending their first Santos Annual General Meeting. Eileen, Musje and Mike are former directors of Oil Search Limited, and we're delighted that they've agreed to join our Board. You will hear from each of them later on. Also present is Darren Lewsen, representing our auditor, Ernst & Young. A number of our executives are either present in person or via the online platform. Now to allow everybody participating in the meeting an opportunity to vote, whether in person or online, I open the polls in respect of all motions that shareholders will vote on today. I invite you to start submitting your votes from this point onwards in the meeting either via your electronic handset, for those of you here in the room, or via the online platform for those of you participating remotely. You can vote on the resolutions at any point during the meeting, and you do not need to wait until the relevant item of business. The polls will close at the conclusion of today's meeting. Please note that Resolutions 8B, 8C and 8D will not be put to a vote because they're contingent on Resolution 8A being passed. It's clear from the proxy instructions received that Resolution 8A will not be passed. Nevertheless, we'll provide shareholders with an opportunity to discuss and comment on these motions when we get to item 8. Shareholders and proxy holders attending in person can vote using their electronic handset and following the instructions, which appear on the screens behind me. Remember, your smart card should already be in the handset. A list of the resolutions should appear on your screen, and you select the item you wish to vote on using the scroll wheel and the green square to select. The selected resolution will appear on the screen. You press the green square to see the voting options. To vote for the resolution, press 1; to vote against, press 2; or if you wish to abstain from voting, press 3. If you are having any trouble, please raise your hand, a Lumi representative will assist you. Shareholders and proxy holders attending online can vote via the Lumi platform by clicking on the bar chart icon. Select the option corresponding to the way you wish to vote. Once the option has been selected, the vote you selected will appear in blue. To change your vote, press a different option to override. Votes can be changed up until the time the polls are closed at the end of the meeting. As advised in the Notice of Meeting, I will vote all available undirected proxies in favor of all Board-recommended resolutions, 2A, 2B, 2C, 2D, Resolution 3, 4, 5, 6 and 7. And I will vote against the resolutions in Item 8, which were requisitioned by 2 groups of shareholders. I'll display the proxy voting outcome for each item of business before moving to the next item. The formal results of the poll will be notified to the ASX after the meeting and will be posted on the Santos website. So I'll commence our business today with my report to you covering our results for 2021 and our priorities for 2022. Please note that the values referred to are in U.S. dollars, unless otherwise referred -- unless otherwise stated. On behalf of the Board, I'd like to acknowledge the work and the commitment of everyone at Santos through 2021. Our Managing Director and CEO, Kevin Gallagher and his team have continued the momentum of previous years with strong 2021 financial results. This year's results reflect a continued focus on our low-cost disciplined operating model and the ongoing transformation of the company into a reliable, high-performance business, driving shareholder value. And they've been delivered in challenging circumstances and an uncertain world. As I acknowledged at last year's meeting, COVID-19 placed enormous pressure on our people, with many enduring lengthy quarantine periods and long swings away from their family and friends due to travel restrictions. We're now into our third year with the pandemic, and while restrictions have eased, it's far from over. On top of that, we've combined 3 different companies into Santos over the last 3 years, all with different cultures and different ways of working. Job roles and organizational structures had to be changed, and this always creates uncertainty for individuals and their families. And this is an ongoing process, and I want to thank people for their patience and resilience as these necessary changes are made. I also acknowledge the impact that they've had on morale and culture across the company. We know this through the feedback we receive from our regular culture surveys where we've seen deterioration in some measures. It's been very difficult during COVID for our management team to get the face-to-face time they would like to have had with our people during this integration processes, especially with the lengthy border closures in Western Australia. I can attest to that one very personally. While we've all learned to work in video conferencing, it can't replace the connectedness that comes from face-to-face interactions. This is something our management team will be very focused on over the coming year, including getting people back into the office while retaining a pragmatic approach to flexible work. Despite the challenges, our staff engagement survey also reported some strong positive cultural improvements in authority and empowerment, performance culture, teamwork and manager support, and importantly, in safety. In all these areas, it's pleasing to see Santos on par or near high performance and industry benchmarks. Overall, the Board considers the strong leadership of our CEO, Kevin Gallagher, and the key management team, is appropriately recognized in the 2021 remuneration outcome. In addition, the visionary leadership provided by our CEO has been recognized in Australia and globally. This includes an invitation from the Executive Director of the International Energy Agency as one of only about 30 global business leaders asked to participate in the 2022 IEA Ministerial Meeting in Paris. This meeting focused on addressing the global challenges of decarbonization without compromising energy security. Santos is particularly recognized for our leadership in carbon capture and storage. Again, the Board considers our CEO's vision and strategic focus on building around our existing infrastructure to supply critical fuels such as oil and gas more sustainably and growing the business through carbon services and clean fuels is appropriately recognized, with the growth projects incentive for the CEO. The external world has also been very challenging and volatile. Last year has seen Russia invade the Ukraine, China seeing greater integration of Taiwan and extending its military influence into the South China Sea and the Pacific, economic sanctions imposed on Russia by the West and China's restrictions on trade with Australia have demonstrated the vulnerability of global supply chains. Combined with low investment in oil and gas supply since 2015, the war in the Ukraine has seen oil and gas prices go to record highs over the last year, with Europe facing an energy security crisis, which is flowing over into other countries. While high oil prices and gas prices are good for our revenues, they're also flowing through supply chains, and they're hurting us in the prices we're paying for steel and many other goods we need to run our business. And above all, they're not good for a peaceful, rules-based world. The future holds more uncertainty than ever, which is why we must continue to focus on the things within our control, and in particular, our low-cost disciplined operating model. That's not to say that we shouldn't also play a role in helping to shape public policy where we can. As I said earlier, Santos' leadership in CCS is attracting international retention, and I believe this is vital that we work with governments where we operate and in our customer countries to help achieve decarbonization -- the decarbonization task ahead of us. At the same time, this has to be done with a focus on energy security and affordability. Higher prices in 2021 exacerbated a reversal of global progress towards universal access to electricity and clean cooking brought on by the pandemic. Nearly 2 billion people still have no access or reliable access to electricity, and 40% of the world's people still use polluting or unhealthy cooking fuels. Now for our financial results. 2021 saw Santos deliver the highest revenue, free cash flow and underlying profit in our history. With the balance sheet remaining strong, the Board was able to declare a final dividend of USD 0.085 per share, a 70% increase on last year's final dividend. The dividend is franked to 70% and returns 20% of pro forma free cash flow for the merged group, less the first half dividends paid. This is consistent with our sustainable dividend policy. Last month, the Board announced a new capital management framework that targets higher shareholder returns. Our aim is to balance the allocation of capital between investments in the business, strategic growth and cleaner energy projects, and higher returns to investors at higher commodity prices. As you know, our disciplined operating model -- our disciplined low-cost operating model is designed to deliver strong cash flows throughout the oil price cycle. This plan retains our dividend policy of 10% to 30% payout of free cash flow up to a Brent oil price of USD 65 per barrel, excluding major growth capital. The plan increases shareholder returns to at least 40% of incremental free cash flow at Brent prices above $65 per barrel. These returns will be in the form of additional dividends and/or share buybacks. Given the strong free cash flow being generated at current prices and with gearing at 26% at the end of March '22, we will return USD 250 million to shareholders through an on-market buyback this year. The buyback is expected to commence this month. While producing record results in 2021 was a transformational year for Santos as we completed our merger with Oil Search, the merger created a company of size and scale with a unique and diversified portfolio of long-life, low-cost oil and gas assets. As you saw in our video, Santos is now a top 20 ASX-listed company and in the top 20 companies in our sector globally. The merger positions the business to fund -- to self-fund our strategic growth and cleaner energy and clean fuels projects as the world decarbonizes. Kevin will go into this year's operational and financial performance in detail, but I'm pleased to report that in 2021, Santos delivered USD 1.5 billion in free cash flow, up 103%; underlying profit of USD 946 million, up over 200% on 2020. These results reflect strong operational and cost performance combined with higher prices for our products. They demonstrate the strength of our strategy and the cash-generative nature of our business. When I addressed you last year, I reported to you that we've taken a final investment decision on our Barossa gas project in Northern -- offshore Northern Australia. Construction of the Barossa project is now 33% complete and progressing on schedule and budget. Just last week, we completed the sale of a 12.5% interest in Barossa to Japan's JERA, an existing partner in Darwin LNG with an interest there of 6.1%. Together with last year's sale of a 25% interest in Bayu-Undan and Darwin LNG to Korea's SK E&S, an existing partner in Barossa, the sale to JERA delivers on our commitment to build a better joint venture alignment between Darwin LNG and the Barossa joint ventures. This alignment is also facilitating our bold plan to repurpose the Bayu-Undan facilities for carbon capture and storage after gas production ceases, which is expected later this year. We've entered front-end engineering and design for this project, which would store up to 10 million tonnes of CO2 per year and would enable us to store 2.3 million tonnes of CO2 per year from our Barossa project, making it one of the lowest carbon gas projects in the world. This is a very exciting, relatively low-cost, large-scale commercial CCS proposal that could store CO2 from our customers in Japan and Korea, who have already expressed great interest in the project. Last year, work on P'nyang and the PNG LNG extension was progressing. In February this year, Santos joined the Papua New Guinea government and P'nyang project participants in executing a gas agreement that provides a clear framework for P'nyang's future development. The signing of a gas agreement marked a major milestone for the project, setting out the fiscal framework and supporting project scoping and evaluation. Subject to a final investment decision and after delivery of the Papua LNG project acquired through the Oil Search merger, the PNG project -- sorry, the P'nyang project would deliver LNG through new upstream facilities in the Western province linked to existing infrastructure, including our world-class PNG LNG plant near Port Moresby. I advised you last year that Gladstone LNG was expecting to achieve a run rate of 6.2 million tonnes of LNG for 2021, so it's very pleasing to report today that GLNG's performance was outstanding, achieving LNG sales of 6.4 million tonnes in 2021. Last year, I reported on the long-awaited approval of our Narrabri Gas Project that was subject to appeal. The appeal process has now concluded, with the project approval being upheld. As a result, we can commence appraisal drilling later this year. Narrabri is a great project in Santos' portfolio and it's important for domestic gas security and affordability on the East Coast. I want to thank the Narrabri community for their ongoing support through this process, and I know they're looking forward to helping us deliver it. I also acknowledge the traditional owners, the Gomeroi Nation, who we've been working with since 2012. In Western Australia, I reported that seismic processing has confirmed 2 high-graded prospects which could potentially be tied back to a Dorado development. Recently, we drilled both the Apus and Pavo-1 exploration wells, and we confirmed a significant discovery to the east of the Dorado field. In terms of the Dorado project, final preparations continue on the path to taking a final investment decision in the second half of the year. We now have a production license, and we're waiting for NOPSEMA to accept our offshore project proposal. At a time when Dorado is very important to Australia's energy security in both oil and gas, the length of time it's taken for approvals is very concerning. While the initial development will produce oil, it will also enable the future gas production at a time when the Australian energy market operator is forecasting potential domestic gas shortfalls in Western Australia. Gas production, of course, will be subject to future approval applications. This year, as a result of the Oil Search merger, Santos is now the operator of the Pikka oil project in Alaska. Pikka is a very low emissions -- low intensity, emissions-intensity oil project on the world-class producing hydrocarbon province of the North Slope of Alaska. The project is currently being progressed towards sanction ready by the middle of this year. Value from the Pikka project may be delivered through selldown processes and/or participation in project development. This time last year, we've successfully injected 100 tonnes of carbon dioxide deep underground into the depleted Cooper Basin gas reservoirs as part of our final field trial for the Moomba CCS project. In November, while Kevin was in Glasgow for the COP26 Climate Conference, we took a final investment decision on this project. It's a globally significant project, and it's now under construction and 14% complete. The project is progressing on schedule and budget and is forecast to commence operation in 2024. The first phase of the Moomba CCS project will safely and permanently store up to 1.7 million tonnes of CO2 per year deep underground. Our investment decision was supported by the Clean Energy Regulators' approval of a framework under the Emissions Reduction Fund that enables the project to qualify for Australian Carbon Credit Units. At last year's AGM, we had just released our fourth annual Climate Change Report with a target to achieve net zero Scope 1 and Scope 2 emissions by 2040, and we committed to providing shareholders with a non-binding advisory vote on this year's Climate Change Report. So I'm pleased to report that all 3 short-term targets for 2025 that was set back in 2018 are expected to be met by the end of this year. Our 2022 Climate Change Report sets out new increased 2030 targets on Santos' journey to becoming net 0 by 2040. They include a target to reduce Scope 1 and Scope 2 emissions by 30%, a target to reduce Scope 1 and Scope 2 emissions intensity by 40% and a Scope 3 target to help customers reduce their emissions by 1.5 million tonnes of CO2 per year. Importantly, our 2022 report sets out our Paris-aligned climate transition strategy and action plan to achieve our net zero goal. Our fifth climate change report affirms that Santos is well placed to manage the risks of climate change, to continue to drive sustainable shareholder returns from long-life, low-cost natural gas assets, and to seize the opportunities that are associated with the transition to provide cleaner energy and clean fuels over the coming decade -- or decades, I should say. I'll have more to say on this when we come to the Agenda Item 4, which is the non-binding advisory vote on our approach to change. The unrelenting focus of Kevin and his team on Transform, Build, Grow strategy, our disciplined, low-cost, cash-generative operating model that truly delivered shareholder value in 2021. Building on more than $5 billion in free cash flow generated from the business since 2016, our merger with Oil Search sets the company up for the future as a global leader in the energy transition to a low-carbon world. I congratulate Kevin and the entire Santos team on a year to remember for the business, a historic year in Santos' long and proud history. I also thank my fellow Board members for their resolve and commitment to Santos over the past year. Look, in particular, I want to acknowledge the important contribution that Hock Goh has made to our company over a period of almost 10 years. Hock is stepping down from the Board at the end of this meeting. He's brought to the Board the benefit of his incredible depth of experience in our industry as a former senior executive with Schlumberger and the benefit of his unique perspective gained from diverse international roles in a range of other industries and countries. So thank you, Hock. And my sincere thanks to you, our loyal shareholders, for your patience and confidence in the company. Like Kevin, I'm very excited about our future, and I hope you are too. I'll now hand over to Kevin.

Thank you, Keith, and good morning, shareholders. In 2021, as markets began to recover from the worst of the COVID-19 pandemic economic slowdown, Santos was able to capitalize because of the resilient and cash-generative business we have built, particularly over the past 6 years. As you saw in the video, we've increased the company's value by more than 4x over that period to around AUD 27 billion. And since our merger with Oil Search just a few months ago, our value has increased by around AUD 6 billion. This year alone, our share price has risen from AUD 6.31 to just over AUD 8. And back in the first of February 2016, it was just AUD 2.92. Our free cash flow breakeven oil price in 2021 was $21 per barrel compared to $48 in early 2016. This performance reflects the transformation journey we've been on since 2016, and -- which remains ongoing as we pursue continuous improvement and exceptional results. The completion of our merger with Oil Search in December has created a business that we can be very proud of, a business of size and scale with the balance sheet strength to fund our activities, enabling us to build around our existing infrastructure, incorporate carbon capture and storage, and grow through carbon services and clean fuels projects, whilst delivering higher returns to you, our shareholders. We have a high-quality portfolio of growth projects, some of which are already under construction, such as the Barossa gas and Moomba CCS projects. We will be disciplined in taking further final investment decisions, ensuring that projects like Dorado, Pikka, Narrabri, Bayu-Undan CCS, Papua LNG and others fit with our strategy and meet our commercial and economic hurdles, including equity interest levels and joint venture alignment. And we will ensure they can be delivered within our capital management framework. As we move into a disciplined growth phase and integrate the Oil Search business, we will maintain our strong focus on costs and ensure that we live by our disciplined, low-cost operating model to drive shareholder returns. 2021 brought global energy security into the spotlight with higher prices and a supply crunch in the wake of rapidly-recovering demand and as a result of a lack of investment in new supply. This renewed focus on energy security was exacerbated with the Russian invasion of Ukraine. 2021 showed us that we must reduce our emissions without compromising on energy security, and we can only do this through decarbonization, not defossilization. Oil, gas and coal still make up around 80% of the world's energy today, the same as 45 years ago. Even under International Energy Agency's net zero by 2050 scenario, the world will still use oil and gas in 2050 and still needs more than USD 10 trillion to be invested in new supply sources over the next 2 decades to meet customer demand. So if we are serious about decarbonization, we must find ways to make these fuels cleaner. None is more important than carbon capture and storage, with the IEA saying it will be almost impossible to achieve net zero by 2050 without it. At the same time, countries around the world are finding that energy and fuel price stability and supply security risks remain critical considerations on the journey to net zero. This provides a real opportunity for Santos because natural gas, along with carbon capture and storage, will play a central role in balancing renewable power. And decarbonizing other energy markets with about half of natural gas production today being used in sectors other than power generation. In 2050, about half of the world's natural gas production will be used to make hydrogen, and about 40% of hydrogen will be made from natural gas. More investment will be essential to ensure supply can keep pace with demand, diversify supply sources away from Russia and the Middle East and deliver access to reliable, affordable and low-carbon energy for global communities. That is why at Santos, we are rethinking the world's energy solutions. It's also why it's so important for us to have delivered another strong set of financial results in 2021, a set of results that positions us to invest in those energy solutions whilst delivering higher shareholder returns. In addition to record free cash flow and underlying profit reported by Keith, Santos achieved records in production and sales revenue in 2021. Production reached 92 million barrels of oil equivalent, which included 1.7 million barrels from the Oil Search assets and sales revenue was $4.7 billion, up 39%. Had the merger been in place for all of 2021, we would have generated an extra $800 million in free cash flow, taking it to over $2.3 billion. This strong performance continued in the first quarter of this year with record performance again in production, sales revenue and free cash flow. Our free cash flow breakeven oil price in 2021 was $21 per barrel, and we are targeting less than $25 again this year. Importantly, for every $10 above our breakeven oil price, we will generate around $450 million in free cash flow this year. Our free cash flow and stronger balance sheet means we are well positioned to increase shareholder returns through our new capital management framework. Our reserves and resource position has been transformed through the merger with Oil Search and taking a final investment decision on the Barossa gas project. This position underpins our long-term LNG sales and purchase agreements that extend through this decade and beyond. 2P reserves increased 80% to 1.7 billion barrels of oil equivalent. The merger added 416 million barrels in PNG, including a much higher interest in our world-class PNG LNG project. And Barossa FID added a further 373 million barrels at our 50% interest level following the sell-down to JERA, which completed just last week. Very importantly, Santos is one of the first companies in the world to book carbon storage resource, 100 million tons of CO2 storage in the Cooper Basin. Increasingly, we are going to see this as one of our company's competitive advantages for the future. Our disciplined, low-cost cash-generative business is delivering real value for all of our shareholders. Our 2021 results were driven principally by performance from the base business and higher realized commodity prices. In 2021, we continue to progress, sorry, our major growth projects. We took a final investment decision on our Moomba CCS project, which will be one of the biggest in the world, storing 1.7 million tonnes of CO2 per year. At Moomba, we are also trialing the CSIRO's post-combustion capture and direct air capture technologies. Moomba is the first in a series of CCS hubs that Santos plans to develop around our existing infrastructure. These hubs will deliver new revenue streams and a step change in our ability to reduce carbon emissions from our production, store carbon emissions from third parties, including customers, and to develop new clean fuels such as hydrogen. Work is progressing on our globally significant Bayu-Undan CCS project, which entered the front-end engineering and design phase earlier this year. The project could potentially store up to 10 million tonnes of carbon dioxide per year, equivalent to about 1.5% of Australia's carbon emissions every year. The Bayu-Undan CCS project in Timor-Leste has the potential to be the largest CCS project in the world, and one of many that will be critical to help the world meet its climate goals. Investigations into assessing the feasibility of our Reindeer CCS project offshore Western Australia are also continuing. All of these CCS projects offer the opportunity to repurpose existing infrastructure and take advantage of large-scale CO2 sources from nearby resources or industrial projects. Importantly, these CCS projects are all at the low end of the global CCS cost curve, giving Santos a critical competitive advantage at a time when they need to accelerate CCS deployment globally has never been greater. Today, the world stores just 40 million tons of CO2 per year in 27 projects. And under the IEA's net zero by 2050 scenario, we will need to store nearly 200x this amount each and every year to meet our climate goals. As Keith mentioned, we had an exciting discovery offshore Western Australia near the Dorado development with the Pavo-1 well. This discovery could add further material value to the Dorado project through a potential low-cost tieback to the proposed Dorado facility. Importantly, both Dorado and Pavo are low CO2 oil and gas resources. We are aiming for Dorado to be sanction ready in the second half of this year. And in Alaska, the team continues to work hard in getting the Pikka project sanction ready. Through our Transform, Build and Grow strategy and our disciplined operating model, we've been able to grow the business and take advantage of on-strategy acquisition and merger opportunities to increase production by more than 60% since 2015, achieving record production in 2021. In Western Australia, we saw increased oil production as a result of 3 dual lateral wells from the Van Gogh Phase 2 infill drilling campaign. Similarly, in Northern Australia, we extended Bayu-Undan expected field life through a successful Phase 3C infill program. In the Cooper Basin, we plan to drill around 100 wells this year after a significantly lower level of drilling activity over the past 2 years. And we also plan to ramp up GLNG drilling with around 350 wells planned this year. PNG LNG continues to perform consistently, with 8.4 million tons of LNG and 110 cargoes loaded during 2021. A final investment decision was taken on the Angore project in the third quarter of 2021, and first gas is expected in 2024. In a world that is demanding a lower carbon future faster, while we are focused on supplying critical fuels more sustainably to meet society's demand, we are also progressing clean fuels projects such as hydrogen as demand evolves. Today, fuel accounts for around 80% of final energy consumption, with electricity making up the remaining 20%. It is clear that natural gas will continue to have a leading role to play in reducing carbon emissions when combined with CCS or by enabling clean fuels such as hydrogen. In 2018, Santos was one of the first companies in our industry to target net zero emissions by 2050. In 2020, we raised the bar, setting a new target to achieve net zero Scope 1 and Scope 2 emissions by 2040. This means capturing and storing more CO2 than we will emit from our operations. As you know, we recently launched our fifth annual climate change report, which outlines our climate targets. And importantly, our climate transition action plan. Santos will maintain a disciplined approach to capital management through the energy transition phase by sustaining our existing long-life natural gas assets to meet ongoing customer demand, by building around our existing infrastructure and growing our investment in decarbonization and clean fuels where we have a competitive advantage. Climate transition investments will meet our disciplined investment criteria, be demand led by our customers and consistent with our low-cost operating model. Potential capital investment is consistent with Paris-aligned pathways to net zero by 2050. And over time, we will increasingly focus on developing natural gas to sustain our existing infrastructure and grow through decarbonization, including CCS and clean fuels projects. This will enable us to reduce our own emissions and potentially those of third parties, including our customers as well as build new revenue streams from carbon services and clean fuels. In closing, we have been and remain unrelenting in sticking to our strategy and implementing our disciplined low-cost operating model, an operating model that's proven its value by delivering consistent results, keeping the business resilient and performing strongly. We continue to generate strong free cash flows, maintain the strength of our balance sheet and provide returns to shareholders. The last 2 years have fostered resilience, innovation, flexibility and adaptability in our people right across the business, and I thank all of them for their contribution to our 2021 achievements. These attributes are a great competitive advantage for Santos as we rethink the world's energy solutions and our ambition to be a global leader in the energy transition. Thank you. I'll now hand back to Keith.

Thank you, Kevin. Ladies and gentlemen, we now come to the formal business of the meeting. The notice of meeting has been distributed to shareholders, and I'll take that as read. I'll address each agenda item in turn, and the proxy voting outcomes for these items will be shown on the screens. Shareholders will be able to ask questions and make comments in relation to each item or group of items. I'll now outline the procedure for asking questions at today's meetings. All questions should be addressed to me as the Chair in the first instance. After I address each item of business, I'll call for questions. At each instance, in order to best manage the interface between questions in the room and via the Lumi platform in writing and verbally, to streamline the Q&A process so as many questions as possible can be answered, I'll first ask for questions from the floor. I'll then address questions via the Lumi platform. First, those in writing, and then those on the telecom facility. James Murphy, our Manager of Media and Communications, is here today to assist with shareholder questions. The instructions for shareholders in the room to ask a question are now on the screens behind me. First, you need to insert the smart card into the slot at the top of your handset. If you wish to ask a question, press the microphone button, followed by the green square, and then make your way to the nearest microphone. When James calls your name, please ask your question. And it's important that as many shareholders as possible who wish to ask questions get an opportunity to do so, and I ask the speakers restrict themselves to no more than 2 questions at a time. If you have 2 questions, please ask both questions when you come to the microphone. To leave the question queue, press the microphone button again and confirm your choice by pressing the green square. If you're attending online, you may ask questions via the Lumi platform in 2 ways. If you wish to submit your question in writing, click on the Q&A icon at the top of your screen. Type your question in the Ask A Question box, and press the Send arrow. You may also ask questions via the teleconference facility. To ask a question verbally via the teleconference facility, firstly, pause the broadcast on the Lumi platform and then click on the link under, asking audio questions. A new page will open where you can be prompted to enter your details before being connected. You will listen to the meeting on this page while waiting to ask your question. When James has announced your call, please ask your question. Now you may start submitting your written questions now, and you may also join the queue to ask a verbal question. To ensure that as many shareholders as possible have a chance to ask a question, I ask that you keep your questions short and to the point. Questions submitted online may be answered in a group if there are multiple questions on the same topic. And I ask that shareholders asking questions in the room or via the facility restrict themselves to no more than 2 questions at a time. If you have further questions that haven't been addressed, you may rejoin the queue and we'll return to you if time permits. As our time is limited, it won't be possible, I suspect, to answer all the questions. I note that we received a small number of questions from shareholders prior to the meeting, some of which have been addressed in mine or Kevin's earlier comments. The questions received covered climate change, gender-neutral language, shareholder mail outs, the Dukas well in the Amadeus Basin, and how to register as a supplier or contractor with Santos. We'll respond individually to issues other than climate change, which is covered comprehensively in our business here today. So now let's proceed to the first item of business, which is to receive and consider the Financial Report, the Directors' Report and Auditor's Report for the year ended 31st of December 2021. I now lay before the meeting the Financial Report, the Directors' Report and the Auditor's Report for financial year ended 31st December '21. I note there's no formal resolution for this item of business, but rather, it gives shareholders an opportunity to ask questions about the Santos Group and its operations. Shareholders may also ask questions of the auditor relevant to the conduct of the audit, the preparation of the content of the auditor's report, the accounting policies adopted in preparation for the -- of the financial statements and the auditor's independence. If you have a question that relates to climate change or remuneration or other specific items of business for today's meeting, please hold your questions until we reach those agenda items later. There will be time for discussion and questions allocated to each of those business items. I'll now take any questions on this item of business from the floor. James, are there any questions on the floor?

Chair, the first question is from [ Dorothy Tai ]. Dorothy, please make your way to the microphone.

Yes, I'm going here. My name is Dorothy Tai, and I traveled here today to [ Gamilaraay ] country to represent my people from Gomeroi, and I'm here today to serve you mob with a cease for trespassing, a cease and desist on my country, and the same with [indiscernible] and [ Garabol ] countries. So I have some tight working fee for you people on the Boards? Kevin Gallagher? [indiscernible] Kevin Gallagher, Manager Director and CEO; Kevin Spencer, Chairman; Yasmin Allen; Guy Cowan; Dr. Eileen Doyle, Hock Goh; Janine McArdle; Dr. Vanessa Guthrie AO; Peter Hearl; Musje Werror. And we're here to tell you is that you're not welcome on Gomeroi country and [indiscernible] country because there's not any proper consent done for our people. You have never consulted with us as traditional owners. You just went straight to the tribunal. So we laid proper consent from the rest of our mobs up there, some we could stop you. We've gotten all there. We don't want this on our country. [indiscernible] means no, so take notice. No trespassing is being served now, and that's all I've got to say..

Yes. Thank you. So look, I just want to make a couple of comments there. We have been working with the authorized applicants of the Gomeroi people, and we've been working with them since 2012 and in formal negotiations in 2015. We've undertaken extensive engagement to ensure the Gomeroi are fully informed on the aspects of the project. We've applied to the native tribunal on the 5th of May 2021 for a future act determination regarding the grant of the PPLAs and we expect the outcome in mid-2022.

And that's the outcome. A notice of trespass and cease and desist on our country.

Yes, I'm very aware of your -- but I'm -- I think it's -- yes but...

Okay? That's not just coming from me. It's coming from a lot of -- from the nation.

Okay. You've made your point. Yes.

It's coming from the Gomeroi nation.

Yes, it's not. We've actually had a -- we've...

Over the last week, and this is where I got the [ appointment ] from.

Okay, fine. I'm just making other shareholders aware of what the process that we've followed through here. I know it's your country, and we respect that. I'd also say that across the country, we are working with 23 different traditional owner groups, and many of those have sort of -- we've executed cultural heritage management plans and indigenous land use agreements with Santos. So look, we're very sensitive to this issue, and I'm very disappointed with that. We take our responsibilities in this space very seriously, and I'm absolutely confident of the engagement process that we've followed to date.

Chair, the next question is from Craig Winston.

Good day, Board. It's good to finally put some faces to the entity threatening my culture and way of life. I'd like to ask the question, the environmental proposals that have been rejected in BAD-200003. What's the validation for that? Why are you just gambling on our behalf? This is our land, our waters. For example, there's a proposal to make sure that all your vessels are double-hulled. Your response was that it's not feasible. Just seeing the meeting earlier, it's ahead of schedule, it's on budget, making all this profit, but these EP proposals, they keep getting rejected. What's the go with that?

About Barossa project, that's correct?

Yes, the Barossa project. I'm from the Tiwi Islands, by the way. I'm representing the [indiscernible] and the [ Gigalatu ] clans.

Good to meet you. Do you want to mention that?

Yes. I mean, I -- we have any EP refusals or submissions that are --

Well, it's in the document, Barossa Area Development 2000003.

Just to make my point, the Barossa project has all of its approvals in place. It's 33% constructed, and there are no more approvals required for the Barossa project.

Yes. What I'm asking is we did not give consent to these approvals. Seismic testing is going ahead, the sound blasting water. There are so many species of marine biota that are going to be affected by this, and these species of marine animals are essential to our culture and way of life.

Yes. I'm not aware of any seismic --

We're not doing any seismic in that area as well.

You are drilling an oil well 100 kilometers offshore of my island, I've been aware of?

We're drilling gas wells.

Gas oil wells, yes.

But there's no seismic activity. Just to be clear.

No, May, this month, there is seismic activity. They have a sound blasting in the water. That's what I am aware of.

Not seismic. However, what I would say is just on the consultation and collaboration with Tiwi Island representatives.

The lack of consultation, yes.

The Tiwi Land Council is the statutory body that represents the -- and the interests of its community. And their role, as you would know, is to ensure that communities are informed and engaged on projects like -- such as Barossa. Which is not on the Tiwi Islands, but it's close by relatively.

Yes, 300 kilometers offshore. The animals don't have political boundaries. So whatever you do out there still has an effect on us.

Santos has a long-established constructive and cooperative relationship with the Tiwi Land Council. And indeed...

But does that include the 8 clans, or is that Andrew Tipungwuti alone? Because Andrew Tipungwuti doesn't represent the entire Tiwi Islands or the 8 clans.

We deal with the authorized representatives, which is the TLC. And engagement in relation to the Barrosa project commenced as far back as 2016. There have been multiple meetings as well as information provision on every stage of the project, and we will continue to do that going forward.

Back then, we were told to not worry about it, that the project is not going through. And we just put it in the back of our heads, and now with COVID and all these deaths, you have used this tactless approach to just bull your way in there. You say you have engaged with people on the land council, but I don't -- I'm a local. I know many other elders and other people there, and they have zero awareness of what's going on. It's only through me and other young individuals like myself that we're putting the words out there. And it's through the ECNT that have been consulting and going out in the community. No Santos representative has come out there and spoke to my people in person. You spring up on Zoom or something. It's an autonomous -- you say you acknowledge and respect aboriginal culture but you don't.

You've made a point. Look, I wouldn't mind having a chat with you at the end of the meeting when we have a bit of a break as well.

Oh, I'd love to. But I'm fine with this as well so...

Good on you. Okay? So am I, so we can have a good chat. Look, I'll just reinforce what Kevin said. We've been dealing through the Tiwi Land Council. Their responsibility as a statutory body is they represent the rights and the interests of the community. I'm not aware of the internal politics on your particular...

Aren't you aware that the Tiwi Land Council is being investigated for corruption and lack of governance?

No, I'm not. I'm not personally aware of that.

So the point that I'm making is if you're dealing with the Tiwi Land Council...

Yes. No. That's why I'd like to have a chat with you at the end of this meeting, if that's all right with you, and we can follow up on that. All right?

Yes, sure. I'll be...

All right, Craig. Thank you very much. Thanks for making your point. I appreciate it. Okay. Our next question then is from Will van de Pol.

Thank you. Thanks for the opportunity, Mr. Spence. Just to introduce myself, Will van de Pol from Market Forces, so we work with shareholders to arrange [ Resolution 8B ], and I'll have another question at that point as well. But a very quick question for me to kick off. About the Dorado project we spoke about earlier, both you and Mr. Gallagher presented on the project that's approaching final investment decision in the second half of this year. Would the Dorado project produce a level of return in excess of the company's weighted average cost of capital under the commodity price assumptions provided by the IEA's net zero by 2050 scenario?

I'm not sure of the -- whether we've run that scenario. We stress test our developments down to, I think, around $40. I think the scenario you're talking about might even go lower than that, down to about $35 a barrel. Certainly, we're robust to those --

The answer is yes based on the time frame. So all the oil that we presume is at Dorado today would be produced well before 2050. And in fact, we'll have transitioned to a gas project well before then. And so the oil is really just the first several years of production. We have to get rid of the liquids in order to produce the gas. The gas would then be backfill for our existing gas infrastructure. So it's really a liquid stripping process in order to produce the gas, and so it's only the first several years where it's got high liquids production. And so if you look at the net zero scenario, those oil prices decline over time, as you would be well aware. But in that time frame, the oil prices would still be, on all future assumption basis, adequate to provide a level of return higher than our cost of capital.

So at that $35, sorry, I think Mr. Spence, you're talking about a $40 -- a barrel stress test, but at the $35 provided by...

That's a free cash flow test, but from a -- we don't disclose our economic assumptions, but what I'm saying is over those first few years, the oil price assumptions would be sufficiently robust to provide a return on capital that's greater than our cost of capital.

And that's an acceptable rate of return? Like, you're happy to take that...

It screens against all of our forward economic hurdles, yes.

But just to be clear, I mean, the ends of these is just one scenario. There are -- the IEA have a bunch of scenarios. The IPCC have some 80 scenarios. I mean, exactly how this plays out, who knows, quite honestly. There are so many different possible ways forward. So that's why it's important for us when we look at these things to actually stress test these sorts of things over a range of different assumptions that would include the sort of scenario you're talking about.

Yes, I appreciate that. But given that Santos has itself committed to supporting the goals of the Paris Agreement and net zero emissions outcome, surely, that net zero scenario, which gives just a 50% chance of meeting the 1.5-degree target of the Paris Agreement should be the sort of central case that the strategic decision-making is based around?

There are many scenarios that get to net zero for 2050, not just the IEA scenario is the point. And each of those have different sort of price assumptions and et cetera behind them, and we try and test a sort of a range of those, not just one.

But the one that gives the best chance of meeting the Paris Agreement goals that we've seen the most detailed data provided through the scenario is that net zero by 2050 by the...

That included the range of scenarios we test.

Okay, thank you.

Our next question?

The next question is from Michelle Surowiec.

Good morning, Chairman and members of the Board. My name is Michelle, I'm also here with Market Forces as a proxy holder. Thank you for the opportunity to ask this question. The original documentation for the Barossa project, for example, the environmental impact statement, didn't include any information about carbon capture and storage, which the company now says it's exploring. How would the cost of adding CCS to the Barossa project impact the project returns? And why hasn't this information been disclosed to shareholders yet?

Well, because we haven't decided -- we haven't committed to build it yet. So I mean, the point that we actually approved the CCS project if shareholders will be made available -- will be made aware of that. So at the time the project was put together, this wasn't contemplated. We certainly made a development. The Barossa development was designed to be CCS-ready in terms of all the equipment on the facility itself, CCS-ready. That was a pre-investment we made as part of the project. But until we got a line of sight to the solution that we've come up with, and in fact, there are several backups to that particular solution, we weren't able to start progressing the CCS option. So basically, the first step was make the facility CCS-ready. We've done that. That's part of the current scope. Then as we've now developed the solution for addressing the CO2 issue at Barossa, we're in the middle of the front-end engineering design work as we would normally do when the costs are well understood and where the business is laid out clearly, we'll make a decision on that. That's the normal process. But we've done already the upfront sort of screening work on that, and we're very clear that this is an attractive business opportunity. And Kevin can say -- it's a good project for us.

If I can add something else here. It's not a Barossa CCS project. It's Bayu-Undan and Darwin CCS project. And that's just a very different project that we're looking at that Barossa will be able to take advantage of to capture all of its reservoir emissions, all of its offshore emissions, and make it one of the lowest CO2 LNG projects in the world. And so that's an opportunity for Barossa, but the project that we have taken feed on recently is actually the Darwin to Bayu-Undan CCS project, which will be capable of taking up to 10 million tonnes per annum of CO2 and be the largest CO2 capture storage project in the world. That project on its own, we believe, will be value accretive. It will not be a cost, it will be value accretive. And that's very important because the people of Timor-Leste will be losing the revenue streams they get from the Bayu-Undan project around the end of this year as that comes to the end of its field life. And today, Bayu-Undan accounts for around 92% of the GDP of Timor-Leste, and so that will be a big hole in the revenue streams in the economy of Timor-Leste. And so to be able to repurpose those facilities and create a very large carbon capture and storage project where we see the demand for reducing carbon emissions growing into the future as the world has to increase investment in CCS projects all over the world in order to have any chance of achieving net zero by 2050. We think that's a good business opportunity, and it just makes good business.

Okay.

Thank you.

Thanks for your question, Michelle. I think there aren't any more questions in the room. So do we have any questions online? James?

Yes, Chair. The first question is from [ Mr. Stephen David Mayne ]. What is the Santos policy position on making political donations? And will we be making any related to the current federal election, including subscription payments or attendance at conferences and fundraising events? What do we think of the Rio Tinto and BHP policies of strictly banning all political donations in contrast to Woodside Energy, which has been a major donor to both sides of politics for many years?

Okay. Thank you. Well, look, at the moment, basically, all payments that we make are in line with federal, state and territory electric commission. Sorry, all donations we made to political parties, they comply with the [ central ] commission reporting obligations. We do make sure -- that are -- for membership of business forums that are conducted by the coalition and the labor party, and those forums are forums that are attended by many companies, not just ourselves -- a very kind of transparent forum where there's an opportunity to learn the policies at the various companies. This is sort of an annual type of event, and that's the vast majority of any donations that we make. And we try and balance those donations across the 2 parties because we don't believe it's right to have one over other. But I think it is important for our shareholders that we are informed of the policies that the various parties are intending to sort of implement. We have made no political donations in PNG, in Timor-Leste or in Alaska. Our membership of those forums is important because it does give us an opportunity to state our case, and particularly, one of our key objectives is to advocate for a very stable energy policy environment. And that's the real driver behind our attendance at these sessions. Thank you.

The next question is from [ Amy Gordon ]. This question is on behalf of [ Bradley Fara ], an [ Aloa ] man and traditional owner of the lands on which Santos wants to frack. What plans does Santos have to work with traditional owners to implement a range of programs that are centered in traditional land management practices to protect land, water and cultural heritage?

Well, we typically would put a cultural heritage management plan together for -- which we would agree with indigenous owners as part of that process. We've done that in almost all the places that we operate. I think it's -- it's a very important thing for us that we have no impact on indigenous heritage. I can say that as a result of some of the incidents that occurred in the last few years, the Board has reviewed all of Santos' practices in this space. We've actually made some changes to sort of actually strengthen our system such that we're really genuinely trying to ensure that we have no significant impact on heritage sites. Programs that we've been implementing also have involved the use of indigenous ranges, et cetera, to sort of -- to protect the land. So I think the sort of things you're talking about would be something that if we were to proceed in the Beetaloo Basin would be a natural kind of next step. Kevin, do you want to add anything there?

Well, I would just say specific to the Beetaloo, Santos works closely with the Northern Land Council as the statutory body that represents interest of traditional owners, but we also work closely with many individual -- traditional owners in that area, in that region as well. And we're very committed to continue to collaborate and work closely and improve our operations and our processes for working with traditional owners, not only in the northern territory, but continually looking to Improve the way that we do that in all of our onshore and offshore operations around Australia and in Timor-Leste and PNG. And we acknowledge that there's always areas that we can improve and -- these interfaces, and we continually review and learn from those reviews to improve our processes going forward. But as I say, we work very closely with the Northern Land Council and have done so for a long, long time.

Okay. Thanks, Kevin. Next question, James?

The next question is from Mr. [ Miquel Peter Thomas ] and Ms. [ Ms. Carolyn Michelle James ]. The Oil Search Scheme of Arrangement booklet said the company would, number one, publish the market value of each share received in exchange for Oil Search shares under the scheme; and number two, obtain and make available a class ruling from the ATO on behalf of participating Oil Search shareholders. Would the Chairman inform shareholders where they can, number one, find the market value of the scheme shares; and number two, obtain a copy of the class ruling?

So just to be clear on the class ruling, we have yet to have the ATO issue a ruling on that. So once that's been published, we can arrange the information to be posted on our website. In terms of the value of the transaction...

I'll have to take that on notice.

I think we'll take that on notice. I'm surprised that's not available. But anyway, let -- if you can leave that with us, we will come back.

Just the share price.

Just the share price on [ that ].

Share price.

$6.30, I think.

40.

$6.40, yes.

And it was in the documentation?

Yes.

Yes.

Okay. We'll come back and clarify that and just put something on the website to make it absolutely clear for everyone, if that helps. Thank you.

The next question is from [ Victoria van Shea ]. A question to the Chair. "Given the strong and stoned opposition to the Narrabri Gas Project in the Pilliga from Gomeroi people, civil society, farmers and now the New South Wales union movement, will you abandon plans to pursue it in accordance with their wishes?"

We've been through a very long consultation process here over many years. We've been through numerous appeal processes. And we've done everything that's been required to us by the law. And they -- we have now a right to explore under that process. I would point out we're at the appraisal stage here in this project. There's no commitment to the project in that sense yet. We've still got proved reserves and all the things that you would normally do in something like this. But we feel very strongly this is an important project for the East Coast of Australia. It's the lowest-cost gas that's available for the East Coast in -- and gas is something that is going to be needed on the West Coast. There is projected shortages by the regulator. So it's the best chance to deliver low-cost gas to the East Coast. And we think that's important as well for energy security and all the industries and jobs that, that support. So I think that we'll continue to push forward here, but we'll try and do it in a way that is as consultative and bring as many people along as we can. I know Kevin goes to the Narrabri community regularly. And certainly, people in the Narrabri itself are very welcoming of us on the project. So there seem to be two kind of extreme factions here. We get very strong support when we go to the community, and there are other groups that are against the project. And we'll work our way through this and try and bring everyone along with us on the process.

I think I could just add to that we do enjoy very strong community support in the Narrabri region, and we understand there are some objectors particularly outside of the Narrabri region, so some of the surrounding areas. But the Narrabri region itself and the community there does show a lot of strong support for our project. I think it's important to also communicate to our shareholders that as you know, we've been talking about Narrabri for many, many years now, and we've now cleared the final legal hurdle earlier this year in January 2022 when the deadline for appeals against the project had passed. And so we've gone through many, many hurdles, many appeals with the Independent Planning Commission that gave its ruling and recommendation for the project to proceed. And indeed, the Independent Planning Commission stated in their report that they found it difficult to reconcile the level of public concern on this project with the reality. And that was after their independent review. And they assessed it as a very low-impact project. So I think the project is now at a stage where it's exhausted the legal processes. We have all the approvals in place to proceed on the project, and it's really a case now of moving forward. And we'll be ready to commence appraisal activities towards the end of this year.

Yes.

And as Keith said, it's been -- it's a long overdue project in many respects, but it's never been more important. The East Coast gas situation is getting tighter every year. Demand for this gas is very high. International gas prices, if our -- gas users have to turn to international markets to get gas, the prices today are around 3x what domestic gas prices on the East Coast are. And the impact that would have on manufacturers and small businesses, not to mention retail users of gas, will be quite significant. So I don't think the demand or the requirement for this project has never been stronger than it is today.

Okay. James?

The next question is from Mr. [ Stephen David Main ]. "Did any of the 5 proxy advisers, ACSI, Ownership Matters, Glass Lewis, ISS and ASA recommend a vote against the Board's recommendations on any of today's resolutions? Has there been a material proxy protest vote against the Board's recommendations on any of today's resolutions, including the three contingent shareholder resolutions? Will you disclose the proxy votes before the debate on today's resolutions so shareholders can ask questions about the reasons if there have been any protest votes?"

Okay. So we will display the proxy votes quite clearly. But I'm of a different view on that. I think people have taken the time to come to this meeting. I think the last thing that they would like to see is a proxy vote put up before they have an opportunity to consider their vote and to see -- and to actually ask questions. I think if you came into the room and saw a proxy vote of 99%, 98% or something, you'd be kind of thinking, what's the point of asking a question. So we'll hold the proxy votes back until the questions and discussion have been held. I think that's important. I can say that of the -- 4 of the 5 proxy advisers recommended in favor of all the resolutions that were recommended in line with the recommendations by the Board and that with one proxy adviser, there were some differences of opinion, and I will talk about that when we come to those items. Thank you.

The next question is from [ Joanna Evans ]. "My question is for the Chairman. During the 2020 AGM, you asked a question about the CO2 content of the Narrabri Gas Project. you refuted the published claims made in Michael West Media and elsewhere of between 25% to 30% CO2 across the project. You responded by denying this to be the case. You said, 'Narrabri exploration and appraisal data from 250 gas samples taken across the area between 2014 to 2019 have an average CO2 content between them of just 5%, not 10%. The areas where we would expect elevated levels of CO2 are typically in the shallower coal seams, where we're not really interested, to be quite honest with you.' This statement is contradictory to the Santos project EIS. A Grant Samuel's report written for the Oil Search merger discloses that the Hoskinsons seams is predominantly higher in CO2 and also states a significant revision of the project size down to 400 wells from the 850 approved. Are you abandoning the Hoskinsons Seam?"

Well, I'm not -- I can't talk about that particular element. I can tell you that the -- I stand behind the comments that were made on the CO2 content. The content of the CO2 in the wells across the region varies quite considerably. And the work that you're referring to actually is a sort of an average CO2 content for that -- for those reservoirs. So individual areas may have higher CO2 content, and there are areas that we're -- we may well avoid. And there are other areas that are actually quite low -- lower than 5%. So I think we need to be kind of clear there. This is -- what we're talking about in 2018 was an average sort of number that we'd be targeting for the development. Kevin, do you want to make a comment on that particular reservoir?

Well, I'm no reservoir engineers, so I'm not going to comment on the reservoir specifically. But what I would say is that the 5% you're referring to is what's seen through the production of the gas versus what's in the reservoir. And so that's what we see at surface when we produce and we measure the gas. We see 5%. And without trying to get too scientific about it, basically CO2 likes to attach itself to coal.

Yes.

And so what that means is all the CO2 doesn't come out with the gas when we're flowing the gas. And so what's in the reservoir versus what CO2 content you get at surface when you produce the gas can sometimes be very different levels. The other thing I would say is one of the objectives of the appraisal program over the next 18 months or so is to assess the different parts of Narrabri because we've not been able to do that because we've not been able to drill new wells over the last few years. And that will then give us a much better mapping of the CO2 levels of the different reservoirs in the different parts of the field. And that would help us then to be able to optimize the development plans and optimize any CO2 handling equipment that needs to be part of that project.

Okay. Thank you.

The next question is from Ms. [ Carolyn N. Lee ]. "I am wondering if the CSIRO report referred to by Kevin in his address was solicited by Santos. Was it paid for by Santos?"

Well, typically, if you want some research done, you have to pay for it to be done. So yes, research that was -- is commissioned due to -- this is the particular piece about the carbon capture and direct air capture, was it?

Yes. Well, the CSIRO, what reference I made in my speech was around the testing of their technology for direct air capture and post-combustion capture in the Cooper Basin. And that technology is their technologies. It's not been developed by us. It's developed by them. All we are doing is helping them fund the testing of that technology to test the prototypes and see if that technology can be made effective and be economic. And we would think that's the right thing to do, and it's a good thing to do to develop new technologies that can help us reduce carbon emissions across not only our industry but post combustion can be applied to many, many different industries.

And to be clear, there are -- I think there are around 14 demonstration-scale projects around the world in direct air capture technology. There are 4 or 5 different technology providers. We believe that the CSIRO have an approach to this that actually could be quite revolutionary. And we're very keen to test it because if we can lower the cost of direct air capture, it means that in places that are very difficult to offset emissions, and you could think about, for example, the CO2 that's emitted during the cement manufacturing process, not from burning gas but actually it has come from the manufacturing of cement, or the huge emissions that come with the manufacturing of steel that are very difficult to offset, that using technologies like direct air capture that don't require a pipeline from the emitter to the storage location, you can build a plant on the storage location, that's a real game changer. And it can -- it has the potential to also create negative [ syncs ] for CO2 by extracting CO2 from the atmosphere. That's what this technology is about. Take CO2 out of the atmosphere and store it underground in locations like our Moomba CO2 capture and storage facility. So it's a really worthy technology. And I'm really pleased that we are investing in it because if it does work, it's a game changer for Australia. But it's not just that, it's a really significant technology globally. The IPCC and the IEA have both identified that as another critical technology to reaching net zero by 2050.

The next question is from Mr. [ Gary John Kelleher ]. "Can you explain how Santos will benefit from international carbon credits with respect to CCS?"

Yes. Well, I guess a lot of good people around the world are asking that question at the moment. One of the clauses of the Paris Agreement is yet to be...

Operational.

Operational, and that's Clause 6, which is about the international movement of carbon dioxide. And that's been given a high priority coming out of COP26, and that's something that's going to be sorted over the next 12 months. In the meantime, for us, with CO2 being transported into -- potentially transported into Timor-Leste, we know that the Australian and Timor-Leste governments have teams that are actually kind of working together to try and establish a framework for that process as well. But Kevin, you were at COP26. Do you want to make a comment about the [indiscernible] authorization?

Yes. Look, I mean, I think, as you said, Chairman, the -- how this will play out is not clear yet in terms of what -- if it will be carbon trading or what the mechanisms for international carbon -- transfer of carbon credits across borders will look like. But, I mean, no doubt it will happen because we have to reduce carbon emissions in order to achieve net zero target by 2050. And consequently, there will be more demand for the safe capture or storage of carbon dioxide from all sectors of society and industry. And I think it's important to note that net zero is not zero. The world still needs hydrocarbons for decades to come, many decades to come. The world could not function without hydrocarbons. That's just a fact of life. And so net zero requires negative carbon technology such as carbon capture and storage, whatever that technology looks like, in order to be able to offset what emissions there are from human activity. And so we see carbon capture and storage as a growing industry, and that's why we're investing heavily. We've already sanctioned the Moomba CCS project, which will be the second largest in the world, which is equivalent to taking 700 cars off the road every single year here in South Australia when it's up and running. And we believe that, that can grow with the Cooper Basin having the potential to dig up to 20 million tonnes per annum by -- for over 50 years. So what that says to us is this is an industry that we want to invest in. We want to become a carbon capture and storage business which grows way beyond our own operations, taking carbon from other companies, from other industries, from other governments and other countries in time. And that's what we are -- that's what we believe that will happen in the decades to come.

Okay. James?

The next question is from [ Victoria van Shea ]. "Santos has committed out of respect to the farming community to not drill on private land in New South Wales without landholders' voluntary consent via its principles, the land access framework. Will Santos make the same commitment today to not drill for gas on Gomeroi native title land without free, prior and informed consent from Gomeroi people?

As I said earlier, we are working to try and resolve and reach an agreement with the Gomeroi people. We're in, currently, in a process through the native title tribunal, and we're committed to respecting the decision of the tribunal, number one, but we're also committed to sort of working on all matters relating to native title, cultural heritage, environment, water and economic opportunities for the Gomeroi people going forward. And I think that's the best way to sort of -- to address this, quite honestly.

Chair, there are no more questions on the platform.

Thank you. Are there any questions online? On the phone?

The first question is from [ Charlie Cox ].

My name is [ Charlie ]. I'd just like to start by acknowledging the traditional owners of the land, where Santos is attempting to frac without their consent. Those of you in the room and online, I recognize your resistance, and I stand with you. My question today is addressed to the Board. Have you or will you apply for public money to subsidize Santos' fracking practices in the Beetaloo Basin?

Sorry? What was the question? Have we applied for public money?

To subsidize fracking.

To subsidize fracking? Not that I'm aware of.

In the Beetaloo Basin?

In? Sorry?

Beetaloo. Beetaloo.

Beetaloo, the Beetaloo.

No, we haven't.

The next question is from [ Broman Voist ] on the Oil Search-Santos merger, [ Broman ]?

Hello, Mr. Chairman. This is a question really for Mr. Gallagher. The Oil Search and Santos merger update data 11th of November notes that one of the seams, the Hoskinsons seams, has high carbon dioxide content. Now I know, Mr. Gallagher, you have already said that you're not wanting to get too scientific about the Hoskinsons seams' carbon dioxide content. But the -- my question is, what is the carbon dioxide content of the Hoskinsons Seam, because it is referred to in the merger as being high? Surely, it's easy to say what it is. And the -- my second part of the question is, since the merger states the poor productivity due to low permeability and/or poor reservoir connectivity makes them uneconomic to produce, does this mean that the poor productivity is the reason for the poor -- for the project size being almost halved? So two parts to my question.

I must -- sorry, so the second part of your question was about the productivity of the reservoir and is that the reason that we have reduced the size of the project? No?

Yes. Yes. The first is -- part of the question is probably more what is the carbon dioxide content of the Hoskinsons Seam.

Let me try and reiterate what I said earlier on. So the carbon dioxide as measured from the producing wells, I think we've got 7 wells producing in the Narrabri region that have been producing for a number of years as part of the pilot test, is 5%. It's 5%. That is the measured CO2 content of those gas streams from those wells. There are coal seams, and including those coal seams, that -- in place underground have measured higher CO2 content, but it does not come to surface. It does not flow with the gas. Hence, the gas CO2 content when it flows is 5% to date. Our appraisal program over the next couple of years is to go and drill additional test wells to appraise different parts of the reservoir that were not -- or fields that we've not been able to drill wells in and test in order to ascertain whether there are high CO2 levels or not from those other areas. And until we do that, we don't actually know. Grant Samuel's view is a very technical view, but it doesn't -- it's not referring to the production of CO2 from those wells. On -- in terms of the productivity, we wouldn't do the project if it was uneconomic. You simply wouldn't do it if it was uneconomic. And I can assure you Narrabri benefits from the drilling cost and technology improvements that we've made in Queensland over the last few years in our Gladstone, our GLNG project, and we've been able to bring those costs down quite significantly and, of course, from higher prices and the external macro environment, which makes it a very robust and would be one of the more appealing projects in terms of internal rate of returns looking forward today. There's also a criticality for that fuel to be produced to the market that I emphasized earlier on. But it would certainly be a very productive -- I'm sorry, a very economic project. The reason that we -- Grant Samuel refers to the smaller number of wells is because they are looking at a phase of the project that we are more advanced on and are working. And so the first phase, I think, is around 400 wells. And so they were basically assessing value or evaluating the project on what was the most mature work done and not for the later phases of that project development, which were less mature.

Thanks, Kevin.

The next question is on the telephone from...

Oh, And if I can say, the reservoir that you were talking to is not part of the Phase 1 development. I think that's an important point. Sorry.

The next question is from [ Kara Kinchilla ] on traditional landowners.

Hello. I'd like to acknowledge the traditional owners who are all on today and my traditional owners, the Gomeroi people. My question today to Santos is that we believe -- we believe that Santos has not provided the Gomeroi people or the Narrabri community with all the appropriate information about the impact of the Narrabri Gas Project and other gas developments on the environment and climate change to be able to make an important decision. How can we fix that?

Well, I think with that -- we fix that by sitting down and discussing it and agreeing what we need to know. I mean that's kind of really where this process that we're currently -- that's currently underway has to lead to, a position where we can see a way forward, sit down together and work out how we can understand the development, what it does, the economic benefits, the risks, all those sorts of things and make -- help you understand, if you like, how those risks are being managed. And for us, it's so important then to be able to sit with you and hear your concerns and be able to address them. And that's -- I think that's what this process is -- negotiation process is all about. Kevin, do you want add anything there?

I think this is a project that's had more scrutiny than any other project that I would be aware of and more data and more information is provided than any other project that I would be aware of. And every single review and every single challenge, it comes up trumps.

Okay.

The next question is from [ Claire Loode ] on cooperative drilling plan.

My question is the ongoing Senate inquiry into the Morrison Government Beetaloo Cooperative Drilling Plan (sic) [ Beetaloo Cooperative Drilling Program ], where so far countless traditional owners reported they never consented to fracking on their land and that their remote aboriginal communities want public money to be spent on things like housing and health care, not fracking. How are your shareholders to be assured that free and prior informed consent has been followed? Can you show us the documentation that demonstrates international standards in consultation are being achieved?

Well, I think in that sense for the Beetaloo, we've been working with the representatives of the traditional owners. The Northern Land Council is a statutory body that represents their interests. And that -- through that, it ensures that the owners are engaged and informed of the life cycle activities along with providing direct economic benefits and opportunities. We've executed an exploration agreement that's in place with the native title parties, and that covers the life cycle of exploration activities. And then for each phase of the program, we undertake community consultations, sacred site assessments, site visits to afford the owners direct access to observe activities. And we provide employment and training opportunities. I think through -- I think activities like that were demonstrating how bona fide it is. We're not using government money for fracking. That's our business. We're in the business of exploring and then potentially appraising and maybe ultimately developing in the Beetaloo. But we've got a long way to go on that yet. We've drilled 2 exploration wells -- 3 exploration well, I guess, to date. And we're really in the stage of sort of assessing the basin. So for the activities that we're currently carrying out, which is sort of exploration, we've put agreements in place with the indigenous groups.

And for any further development, we would...

[indiscernible].

Then go through the process of getting approvals and agreements in place for that. And I think the question around the government's development plan really is a question for...

For the government.

For the government as opposed to a question for us. But we will not be seeking any government money to fund our drilling activities in the Beetaloo Basin, and I've made that clear within my organization.

The next question is from [ Nick Clyde ], who is a proxy for [ Susan Black ].

My question is also about the Narrabri Gas Project. It's about Perdaman and their fertilizer plant. So my understanding is that Perdaman had been counted as a company that may seek to utilize gas from the Narrabri Gas project for their -- for -- well, for a proposed ammonium nitrate plant at Narrabri. However, Perdaman have recently received about $255 million of NAIF funding to build a $4.3 billion project in Western Australia using West Australian LNG where they want to convert that to urea in the Pilbara. So my question is, isn't it now highly unlikely that Perdaman would pursue a small ammonia -- sorry, nitrate plant at Narrabri given the scale of the Pilbara project? And is it fair to say that there is no evidence whatsoever that Perdaman have advanced any plans for a similar project at Narrabri?

Perdaman is not the only option for Narrabri either. I mean we -- there's options such as power generation and there's the option of exporting kind of gas. It -- the -- I don't think they've withdrawn from the agreement with us. So we actually have been talking to them about that quite. And they're still quite engaged as far as I'm aware.

If Perdaman want to go ahead with their fertilizer plant or not, that's really a question for Perdaman, not for us. They are one of many potential customers, and the demand for the gas from Narrabri is very, very strong, very strong, particularly in the current East Coast domestic gas environment. What I would say, though, is that we have done work with Perdaman, pre-feed work, where our engineering teams have been working with theirs to advance their plans so that we can understand the scale and the materiality of their project. But as I say, I think the question as to whether they go ahead with that or not is really a question for Perdaman.

The next question is from [ Samala Cronin ] on Tamboran Resources.

[indiscernible] My name is [ Samala Cronin ] and, through the Chair, the ongoing Senate inquiry into the Morrison Government Beetaloo Cooperative Drilling Program, which will hand down its final report in August this year, last week noted that corporations with close ties to Santos, namely Tamboran Resources, have not complied with the Senate inquiry process and pay hefty fines. Tamboran Resources received $7.5 million in gas [ royalties ] earlier this year. If you're a private company and you receive public money, that means that you are now accountable and have to be upfront and transparent not just with your shareholders but with the Australian people.

So is there a question there?

I'd like to get a note here that Tamboran Resources was ordered by the federal Senate of Australia to front to a Senate inquiry, and it failed to do so. Now the Board has deflected many times on issues about free and prior informed consent have come up [ this year ] to the NAIF-led Northern Land Council. The Northern Land Council was also ordered to front at the Senate inquiry due to complaints from traditional owners, who they were meant to represent, who felt they were not getting free and prior informed consent on these processes. Now my question is, what is Santos and your partner, Tamboran hiding in [ Senate ], in public and their shareholders about their project in the Beetaloo Basin?

I think we made it clear that we haven't received any government funding for our activities in the -- and I'm not able to comment on Tamboran's approach to that. But I'm confident that -- of Santos' -- we've funded our own activities. We're not relying on public funding for the things that we're doing. And it's just not appropriate for me to comment on Tamboran.

Chair, the last...

And we did attend the Senate inquiry.

Yes. Good point.

Chair, the last question from the phones is from [ Madeline Burkett ].

My question is the aboriginal areas [indiscernible] for registering sacred sites, noted that the practice of shale hydraulic fracturing (sic) [ fracking ] will have significant impacts on sacred sites and [indiscernible] arising from interference with surface water or groundwater in the [ ante ]. Considering the fallout from the disruption of [indiscernible] Geroge and -- Gorge and a direct [indiscernible] to the Senate inquiry investigating the destruction and the recent [indiscernible] Senate inquiry, will Santos ensure its projects have completed cultural water mapping surveys undertaken to better understand the cultural interconnection between groundwater and surface water across [indiscernible] Santos nearest permit area in the Northern Territory?

I think when we do these activities, as I said before, on the cultural side, we'll be looking to put cultural heritage agreements in place. And as part of our -- any moving forward of the development, one of the requirements under the environmental legislation would be for us to comprehensively address any impacts that could potentially happen as regard to water. So they would be addressed in any way forward. The point at the moment is that we're really in a very early exploration phase in the Beetaloo Basin and the process to get to what you're talking about really is quite a considerable way down the track. Kevin, anything you want to add there?

No, I think you got it, Chair. Thank you.

Okay. So look, there are no more questions, so we'll move to the next item of business, which is the election and reelection of directors. And we'll address each of the resolutions in this item and then take questions on all the elections and reelections together. So Peter Hearl is retiring by rotation and, being eligible, offers himself for reelection. Peter was appointed to the Board in May 2016 and is Chair of the Environment, Health, Safety and Sustainability Committee and a member of the People and Remuneration and Culture Committee and the Nomination Committee. Further biographical details in support of his reelection are contained in the Notice of Meeting. The Board, with Peter abstaining, recommends to shareholders that they vote in favor of Peter's reelection. I now invite Peter to speak on his reelection.

Thank you, Keith, and good morning, ladies and gentlemen and fellow shareholders. It's again a great privilege to have been nominated by my fellow directors for reelection to what would be a third term as one of your nonexecutive directors. If reelected, I will continue to work with both Kevin and his management team and your Board in the best interest of all stakeholders in our great enterprise. As Chair of the EHS&S Committee, I'm passionate about the pathway that Santos has chartered towards a cleaner energy future and achieving net zero Scope 1 and 2 emissions by 2040 while, at the same time, continuing to deliver industry-leading sustainable financial and operating results. In the 6 years I've been on the Santos Board, I've witnessed and participated in the incredible transformation of Santos under Kevin's visionary leadership, a transformation which all of you should be very proud. From the engineering of our business to a low-cost operator to the growth in our reserves and resources, to the successful acquisition and integration of both Quadrant and Conoco and, above all, the most recent merger with Oil Search Limited. The Santos of today is a truly modern, fit-for-purpose energy company. These achievements, coupled with our clean fuels and lower emission strategies, make Santos well placed to capture the many opportunities that lay before us and equally meet the challenges of the years ahead. In closing, I believe my past and current track record as a public company NED across a number of industries, along with my 18-year downstream oil and gas career with Exxon in Australia and the United States, together with my 17-year global executive career with PepsiCo and Yum! Brands provide me with the skills and experience to continue to act in Santos shareholders' best interests. And I'll be honored if you again put me -- put your trust in me for a further 3 years as one of your nonexecutive directors. Thank you for listening.

Thank you, Peter. Shareholders have an opportunity to ask questions in relation to Peter's reelection at the end of this item of business. I'd like to remind shareholders who haven't yet cast their votes on the resolution that voting on this resolution and all other items is open. Voting will close at the conclusion of the formal items of business. [Voting]

I'll now turn to Item 2b relating to the election of Dr. Eileen Doyle. Eileen was appointed to the Board on the 17th of December 2021 and, subject to election, will join the Environment, Health, Safety and Sustainability Committee. In accordance with the constitution, Eileen retires and, being eligible, offers herself for election. Biographical details for Eileen are available in the Notice of Meeting. The Board, with Eileen abstaining, recommends to shareholders that they vote in favor of Eileen's election. I'd now like to invite Eileen to speak to her election.

Thank you, Keith, and good morning to everyone. It's still just morning. I am presenting myself for election after being appointed to the Santos Board following the merger with Oil Search. I am honored to have been nominated by your Board for election as one of your nonexecutive directors. If elected, I will continue to represent shareholders' best interests and properly consider the interests of all Santos stakeholders. I have the capacity and competency to serve the company and its shareholders. With regard to capacity, I am able to meet all of my commitments to the Santos Board and its committees. I will have the time and commitment to serve your interests. With regard to competency, I have been a Nonexecutive Director on public listed companies since 2000. I am a fellow of the Australian Institute of Company Directors and served on their National Governance Committee for 8 years. I have significant domestic and international business experience. I have held senior executive and nonexecutive director roles across many industries, including heavy industry, technology, logistics, building materials, research, finance and oil and gas. I am the past Chairman of PWCS and the Hunter Research Foundation and the past Deputy Chairman of CSIRO. I joined the Oil Search Board in 2016 and was a member of the Audit and Risk Committee and Chairman of the Health, Safety and Sustainability Committee. After the merger, I was then appointed to the Santos Board in December 2021. I believe there is such great opportunities for Santos to provide a high return to shareholders through both growth and dividends, and I look forward to making a contribution to Santos being a sustainable company. I thank you for listening and for the great support I have already received. Thank you.

Thank you, Eileen. Shareholders will have an opportunity to ask questions in relation to Eileen's election at the end of this item of business. And again, a reminder, if you haven't cast your vote on the resolution, you can do so now. [Voting]

I'll now turn to Item 2c relating to the election of Mr. Musje Werror. Musje was appointed to the Board on the 17th of December '21 and, subject to his election, will join the People, Remuneration and Culture Committee. In accordance with the constitution, Musje retires and, being eligible, offers himself for reelection. Biographical details for Musje are contained in the Notice of Meeting. The Board, with Musje abstaining, recommends that shareholders vote in favor of Musje's election. I'd now like to invite Musje to speak to his election.

Thank you, Chair, and good morning to all. I bring greetings from Papua New Guinea. I am indeed honored and privileged to be given the opportunity to serve on the Santos Board following the merger with Oil Search, where I served as a director for 12 months. Let me at the outset acknowledge the Chairman, Keith, and the Board for considering me to become a director on Santos Board. The caliber of the Board led by Keith and the management team led by Kevin is world class. And they position Santos as a leader in the industry to achieve disciplined, sustainable growth and enabling higher shareholder returns. As you may have read from my bio, my background is in the mining industry and I've worked with the Ok Tedi mine in PNG for over 30 years. I commenced my career in 1988 as a science graduate and worked my way up to become the first PNG National Managing Director and CEO of the company. I've always been keen to work in or be associated with the oil and gas industry but never had the opportunity until last year when I was approached to become a director on the Oil Search Board. I accepted the role not knowing that 12 months later, I will become a director in an ASX 20 company. For our Papua New Guinean, this is a significant achievement not only from a personal perspective but also from a national perspective. It has opened the minds and thinking of my fellow Papua New Guineans that they, too, can serve on boards of global, publicly listed companies such as Santos and, with the exposure and experience, contribute to the development of PNG. Santos greatly supports social and economic development in PNG and will create opportunities for Papua New Guineans to gain international experience in the company's Australian operations working with a highly competent team. Going forward, I am confident Santos will become a household name in Papua New Guinea. While my experience in this industry is limited, what I bring to Santos is my operational experience, knowledge of the PNG extractive industry, strong stakeholder engagement skills, especially when dealing with government and communities. I'm ready to work with other members of the Board to take Santos into an exciting future and look forward to your approval for my reelection. Thank you, ladies and gentlemen, for listening.

Thank you, Musje. Shareholders will have an opportunity to ask questions in relation to Musje's election at the end of this item of business. A reminder, if you haven't yet cast your vote on the resolution, you may do so now. [Voting]

I'll now turn to Item 2D relating to the election of Mr. Mike Utsler. Mike has been nominated by the directors in accordance with the constitution and, being eligible, offers himself for election with effect from the conclusion of this meeting. Subject to his election, Mike will join the Audit and Risk Committee. Biographical details of Mike are contained in the Notice of Meeting. The Board recommends that shareholders vote in favor of Mike's election. I'd now like to invite Mike to speak to his election.

Thank you, Keith, and good afternoon, ladies and gentlemen. I do have the honor today to be before you as a candidate for consideration to be elected to the Board of Santos. I'm a petroleum engineer by background with now 40-plus years of experience working all over the world in our industry across the upstream, midstream and downstream portions of our business. My career started with Amoco and then progressed through the acquisition of Amoco by BP for 36 years. After completing -- and during that period of time, I held assignments literally all over the world in both upstream and offshore and onshore operations and activities. Having moved from that opportunity set, I was given the opportunity to become COO of Woodside in 2013, where I spent 5 years from 2013, 2018 supporting Woodside's operations and activities here in Australia and abroad. Having left Woodside in 2018, I moved back to the United States, where I participated in a small private equity downstream electrical power generation business in which we took that company public. In 2020, I became the Executive Chairman for Otto Energy, which is an ASX-listed, small-cap oil and gas entity, and continue to do so in that role. Over the many years that I've been involved in the industry, I've had the opportunity to participate in not only profit but for nonprofit opportunities in a Board position, which gives me experience in supporting Board efforts and activities. Most recently, in 2021, I was appointed to the Oil Search Board and take that opportunity to bring those skills and knowledge of the operations that Oil Search brings -- or brought in terms of its assets, operations and activities both in Alaska and PNG and across the rest of their portfolio. I do believe that I will bring Santos a significant level of not only experience but energy and passion that will focus on supporting the Board and the management team's efforts in delivering organizational and operational excellence. I do have a proven track record in the areas of corporate governance, risk management, planning and strategy, a significant focus on technology in the areas of our transition to a cleaner fuels environment and the commercial and financial aspects of our energy sector. Above all, I do believe that it is a company's responsibility to operate safely, ethically and consistent with its values and for the good of all the stakeholders, including you, the shareholders. I continue to be very highly engaged in our industry and a strong passion for what we have, an opportunity. And I'm excited about and deeply interested in what I believe is the opportunity for Santos to be a true world leader in the space of energy transition. So I thank you for this opportunity to be considered, and I look forward to your support. Thank you.

Thank you, Mike. So again, a reminder, if you haven't cast your vote on the resolution, you may do so now. [Voting]

So I'll now invite questions in relation to the election of directors. James, are there any questions from shareholders in the room?

Questions in the room.

There are no questions in the room. James, are there any written questions submitted by the Lumi platform?

Chair, the first question is from Mr. [ Stephen David Main ]. "Question on Item 2A, reelection of Peter Hearl. Could Peter Hearl please outline his personal approach to ESG, particularly the social bit, given that he is Chair of Endeavour Group, the world's largest multi-venue poker machine operator, which drains an estimated $1.5 billion a year from Australian gamblers on the 12,000-plus machines at more than 300 venues? Also, can Peter please explain why Endeavour Group continues to understate its pokies revenue unlike rival pokies giant, Crown Resorts and Star Entertainment? Does he believe in transparency even when operating in so-called sin industries?"

Just before Peter says anything there, I don't think it's appropriate that Peter says anything the Endeavour Group at the Santos AGM. That's a question for the Endeavour Board meeting. And Peter, maybe you want to say a comment about the -- your ESG.

Look, the only thing I'd say is that I don't see anything at odds between what Santos does and what Endeavour does in its approach to ESG matters. Both strive to be at the leading edge of that space, and I'm very comfortable with the fact that both companies that I'm involved in, I'm very proud to be part of both companies, lead the way in many aspects of ESG. I'm happy to answer the questions regarding the Endeavour specifics that Mr. [ Main ] has raised at the Endeavour AGM, which will be held later this year.

Thanks, Peter. James?

The next question is from Mr. [ Stephen David Main ] again to Peter Hearl. "Would Peter Hearl agree with the assessment that a majority of the Santos directors, including himself, adopt an old-school-tell-them-nothing approach to external stakeholders and so-called activists. As a director, was he made aware of the various written transparency requests I made 3 weeks ago before today's AGM? And was he involved in the decision to seemingly reject all of those requests, demonstrating an old-school bunker mentality to stakeholder engagement and transparency? What is his view about displaying the proxy position before the debate and whether Santos should publish a full transcript of today's AGM like his sponsor at Endeavour Group, Woolworths, has done for the past 2 years?

So just before Peter raises that, just to be clear to everyone, Mr. [ Main ] has written an article, it's available on the Internet, that lays out the questions that he will be asking at annual general meetings. I've certainly been through it. And we've actually answered some of the questions that he raised in that already. And I think the kind of -- the question around transparency, I think, is a fairly obvious one. You attend our meetings and we talk very transparently with you about this, and I can't -- I just -- I really sort of struggle with that kind of question in the way it's sort of phrased, quite honestly. Peter?

Yes. I'm very comfortable with the fact that Santos like Endeavour and any other company I've been involved in the past 10 years as an NED does everything it can to be as transparent as they possibly can.

We won't be publishing a transcript of the meeting, but we will be putting this -- the recording of this meeting online and will be available so shareholders have the opportunity to actually participate in the meeting, if you like, online subsequent to the meeting to actually understand exactly what we said. Yes, any other questions, James?

The next question is from Mr. [ Stephen David Main ] on Item 2B, the reelection of Eileen Doyle. "When disclosing the outcome of voting on all resolutions today, will Dr. Doyle advocate internally for Santos to advise the ASX how many shareholders voted for and against each item, similar to what happens with the Scheme of Arrangement? This will provide a better gauge of retail shareholder sentiment on all resolutions and was a disclosure initiative adopted by the likes of Metcash, Ultum and Dexus after their 2021 AGMs and G8 Education and GQG Partners as recently as last week? Does the Chair have a view of this request which was first made in writing 3 weeks ago?"

So the request that was made in writing, the publication you're referring to, is the publication on the Internet. So I haven't received anything addressed to myself personally on this, just to make it absolutely clear. I am aware of the publication, as I said. And at the moment, my view is that we publish the number of votes that are received for and against the resolutions. In terms of whether we choose in the future to do any further disclosure around that, that's a discussion that I'm prepared to have with the Board, but our current practice is not to do that.

I'm comfortable with the current practice, Chairman.

Yes. Thank you. James?

The next question is from Mr. [ Stephen David Main ] on Item 2B, the reelection of Eileen Doyle. "Could Dr. Eileen Doyle outline her approach to fair treatment of retail shareholders in capital raisings? For instance, when she was serving on the Oil Search Board in 2020, why did she agree to a heavily discounted, $760 million institutional placement at $2.10, a 23% discount to the previous close, whilst limiting retail shareholders to the accompanying 1-for-8, $400 million pro rata offer, which was non-renounceable? Retail shareholders owned about 20% of Oil Search going into this offer but then only contributed 6.9% or $80 million of the $1.16 billion raising. Will Dr. Doyle support Santos launching a discounted, 30,000 retail-only share purchase plan as a make-good for this appalling past treatment of retail shareholders?"

Just to be really clear, this is Oil Search business from the past, and I think this is a new company, the merged Board of Santos and Oil Search going forward. I think you've got to look to Santos' practices here in the past. I would expect to treat retail shareholders fairly in any kind of capital raise. And that's a starting point for every sort of discussion around that, quite honestly, and I'm sure Eileen has a similar view. So I think just to give you reassurance, the starting point has to be that, in a capital raise sense, it needs to be equitable and fair to all shareholders, retail and institutional.

The next question is from Mr. [ Stephen David Main ] on Item 2D, election of Michael Utsler. "Whilst the candidate is clearly a hydrocarbons lifer, is it appropriate for Michael Utsler to serve on the Santos Board when he is the full-time Executive Chairman of rival listed energy company Otto Energy, which has the share price currently valued at just $0.01, giving it a market capitalization of $67 million? Shouldn't the Santos Board be populated by professional directors who can give Santos 1 to 2 days a week, not full-time CEOs of tiddler Perth-based wannabe resource companies?"

Let's just -- before Mike makes a comment on his tiddler -- first, I do want to make something really clear here. I mean if we go back to, for example, in the Oil Search merger, there were something -- or 40 or 50 meetings, I think, held by the Oil Search Board. Mike is based in the U.S., in Atlanta. He attended every one of those sessions. He's up at 2, 3 a.m. in the morning, sitting through 2 or 3 hours of meetings. He's a serious director. He's -- as the COO of Woodside, he's been very involved in the management of one of Australia's major companies. And with his background from BHP (sic) [ BP ] and Amoco and long, deep experience he's had in the oil and gas industry, he brings much needed skills to the Santos Board. So I'm very comfortable with the contribution that Mike will make, and I'm very confident, from talking to the Chairman of the Oil Search Board and to other Oil Search directors, of the contribution he made on that Board. Mike?

Thank you, Keith. And to the question that is asked, I remain absolutely confident that I can provide the support to and be a part of this very dynamic Board associated with Santos and fulfill all of my obligations and responsibilities. As Keith mentioned, I'm actually based in the United States. We are a very small entity in terms of Otto. Yes, we are Perth and ASX listed, but we focus specifically in the Gulf of Mexico as a nonoperator. The organization that I'm responsible for has a total of six employees. And as a nonoperator, we don't physically are involved in the day-to-day aspects of those operations. We're -- and I'm charged -- responsibilities associated -- that is helping to build that company and to build its capabilities and capacities for its future, for its shareholders. I see that as a benefit in some regards to -- it brings the experience and understanding as Chairman and as an NED of an oil and gas entity listed in the Australian market to be able to bring that same capability to a much larger entity of the size and scale of Santos along with my other Board experiences. I think for all of us as Board members, we balance the aspects of our opportunities to support the entities that we've been invited to join and that shareholders have demonstrated their confidence in us. And I truly am excited about what I believe I can bring to the Santos Board, and I'm very confident that I'll be able to support all of the responsibilities that come with that as an NED in terms of time and commitment to the enterprise.

Okay. Thanks. James, are there any further questions?

The next question is from Mr. [ Stephen David Main ] on Item 2D. "Santos is famously an Adelaide-based company, but Michael Utsler is based in Perth. How many of our directors actually live in Adelaide? And has Michael visited the Santos head office in Adelaide as yet? Have any physical board meetings being held in Adelaide yet? Will we appoint an Adelaide-based director before next year's AGM in Adelaide?"

So we do have one director who's Adelaide based, and that's our Managing Director, of course. I think one of the strengths of our Board is its diversity. We have two directors based in the U.S. We have a director who comes from Papua New Guinea. Previously, [ HOPCO ] was actually based in Singapore. We -- diversity is not just about gender. Diversity is about Board experience. It's about geographical diversity, understanding what's going on in different countries around the world because our business is actually a global one. So -- and in terms of Australia itself, I'm from Western Australia. We have directors from Melbourne. We had a director from Brisbane. And we have some directors that are based in-country, New South Wales and in Sydney. We actually have quite a diverse Board, which I value greatly. And I think that's probably all we need to say about it. Have we had meetings in Adelaide? Well, we had one a month ago in Adelaide. We have meetings in Adelaide regularly. It's where most of our meetings occur. But as a philosophy, we also try and rotate our Board meetings around the various locations around Australia, New Guinea. So in December this year, we'll be holding our Board meeting in Papua New Guinea. We've had Board meetings in Darwin. We've had Board meetings in Brisbane. We try and move our operations -- our Board operations around the countryside so that we can actually attach site visits, for instance, to our Board meetings and go and visit the locations where our people are working. All very important. So yes, Adelaide is the place where we hold most of our meetings, as we rightly should. We have our head offices here. But we also do try and get around the countryside and get out and visit our sites as part of our Board meetings. Thank you.

The next question is from Mr. [ Stephen David Main ], Item 2C. "Congratulations to Musje on being appointed to the Santos Board. Could the Chair comment on the process by which the three successful Oil Search directors were promoted to our Board? Were the unsuccessful candidates disappointed? And could Musje comment on whether the Oil Search Board made the decision or whether that was up to Santos directors? Under the merger terms, are we obliged to have a PNG-based Director on the Santos Board?"

No, we're not. Of course not. But you would have thought that it was fairly logical that if we've got 40% of the Papua -- of the PNG LNG project, that we have the Papua LNG project in development, that having a good understanding of the political scene in Papua New Guinea, how things work, et cetera, is very important. So one of the criteria the Board sort of set was good knowledge of PNG, and Musje brings that with him quite clearly. The process was one of a number of directors put their hand up. We did went through the normal process that we would go through for the appointment of any director, where we did a series of interviews, we compared the director's skills against the competency profile that we're desiring for the company, we did all the normal sort of security checks, et cetera. All the things that you would normally do with the appointment of any director was applied in the process of selecting these three directors. And yes, the directors who weren't appointed were disappointed, as you would be.

Chair, we have no more Lumi questions on these resolutions.

Thank you all for your patience. Okay. Now we'll go back to -- oh, sorry, for your -- thank you for your questions. I should say thank you, [ Stephen ], for your questions. But the results of the director proxy voting for each of the -- the director elections and reelections are now shown on the screens behind me.

Yes.

So the director proxy results indicate that each of these resolutions will pass. And I congratulate Peter on his reelection, Eileen, Musje and Mike on their elections.

Thank you. I'll now move to Item 3, the remuneration report. And this item of business asks shareholders to adopt the company's remuneration report. As already noted, 2021 was a year of record outcomes underpinned by a strong base business performance and the completion of the merger with Oil Search. Throughout the year, our people continue to manage significant social business -- social and business disruption of COVID-19, and I think that unfortunately played into a decline that we saw in our safety performance relative to previous years. Put a lot of stress on people. I'm pleased to say that our integrity management, though -- asset integrity management continues to deliver significantly improved outcomes year-on-year. In our address earlier, Kevin and I reported the strong 2021 financial results. This strong performance contributed to our company's scorecard outcome of 135.6% of a target out of a possible 167%. In 2021, the Board determined that to ensure that incentive outcomes are appropriately aligned with shareholder experience during the year, a cap of 5% of free cash flow would apply to the short-term incentive pool. The Board reviewed the 2021 result, which delivered a final dividend that was significantly higher than the previous final dividend, and we noted the result also fitted well within the 5% cap. The 2018 long-term incentive award was tested following the end of the full year performance period. The share price increased by 15.8% over the performance period. Our total shareholder return was over 30%, and we're the only one of our domestic peers to increase our market cap during the period. The company's average free cash flow breakeven over 2018 to '21 was 34% lower than at the start of the performance period. And the return on average capital employed over the term was 129.8% of weighted average cost of capital. These strong long-term performance outcomes contributed to an overall vesting outcome of 89.5% for the long-term incentive award. We continue to strengthen the alignment of executive remuneration to the company's emissions reduction and to other key areas of ESG focus such as our community and landholder engagement. In 2022, the company's scorecard has been refined to recognize the criticality of delivering the company's target of Net Zero emissions by 2040, increasing the weighting for the second year in a row to 15%. The 2022 scorecard also includes measures focusing on effective decommissioning and achieving strong synergy outcomes from the Oil Search merger. It's apparent from the proxy voting instructions lodged prior to the meeting that a first strike is likely against the remuneration report. The Board is disappointed with this outcome, given the care that was taken to develop an effective and fit-for-purpose remuneration framework to drive the strategic objectives that the Board has set for management. And it's very important to ensure the management team is properly rewarded and incentivized to deliver the transformational period we're going through, including the global energy transition and the merger that we've just completed. The Board is 100% behind management and supports their strong performance to deliver our strategic objectives. Four of the 5 major proxy advisers recommended that their institutional clients vote in favor of the report. One proxy adviser produced a report which was materially flawed. We made them aware of these flaws, and it's very disappointing that they did not subsequently adjust their advice. Further, I'd point out that the CEO's incentive opportunity -- this is the growth incentive opportunity, is at 100% risk and subject to key performance measures. In addition, when the CEO's existing total fixed remuneration, his short-term incentive and the long-term incentive are combined with the annualized incentive opportunity. The CEO's total remuneration still sits below our target 75th percentile relative to our peer group based on independent benchmarking. In fact, the CEO's base pay or TFR is below the median relative to our peer group. Notwithstanding this, we respect the right of shareholders to hold alternate views, and we'll continue to engage with our shareholders on this matter. Now I'd be pleased to take any questions you may have in relation to the 2021 remuneration report. If you have any questions relating to the MD's proposed grant of share acquisition rights or incentive award, please hold those questions and you can raise them when we come to these agenda items. James, are there any questions in the room?

Chair, there are no questions in the room.

Okay, James. Are there any written questions submitted via the Lumi platform?

Chair, there are no Lumi questions on this resolution.

Okay. Are there any callers on the line?

Chair, there are no telephone questions on this resolution.

It's kind of rather frustrating for me that we have a potential strike against the company, and we haven't had a single question on remuneration. Let me just spend a moment just expanding for you on the issue with the proxy adviser. The proxy adviser in question here is ISS. And in fact, there was an article published in the Australian recently, which we think probably should be retracted because it's incorrect. We pointed out a number of flaws to the proxy adviser and they haven't revised their report. And I'll just highlight for you some of the flaws. The first of those was to do with how they treated the -- you recall that our growth incentive scheme for the Managing Director is to award $6 million over 5 years, which is kind of based on milestones that were achieved along the way. It's at risk. And in fact, if all those objectives were achieved, I'd be very delighted and very surprised because they are not trivial objectives. What we've effectively done in that scheme is codify our strategy and set for Kevin the priorities that we really want for the business to get -- to set the sound foundation for the transition going forward and to deliver these major capital investment projects that we have on budget. Now the way the proxy advisers treated that $6 million is to just add that to his remuneration fully for this year. And then basically said he's over-remunerated. When in reality, last year, I think Kevin earned an entitlement of just over 30% -- and not an entitlement. We actually reached milestones that accumulated 30%. Still subject to one final test, though, is that Kevin is here until the end of 2025. There's a retention element to this particular scheme because we think it's important as a Board that we have Australia -- one of Australia's best CEOs, if not the best, available for us to actually deliver to Santos in these very challenging times. So that's the first flaw. That all the scheme was actually loaded onto 1 year rather than amortized over the 5 years in which the scheme would be implemented. The second flaw was the benchmarking. And the benchmarking that was done was not of a high standard, and it certainly didn't match the benchmarking that was done by 2 different groups for us, in fact. We used an ASX benchmarking approach, where we took 15 companies up and 15 companies down. And then we used the peer group approach. And both of those indicated the package with this scheme amortized over a 5-year period was still below the 50. The benchmark group that was used included companies that were as low as $1 billion market cap and not remotely comparable to the business we run. And I think the median at the time of the peer group was around $8 billion at a time when Santos was $14 billion and it went out to $27 billion. So the benchmarking is not reliable. And then the final thing, another illustration was an assumption or an assumption or an incorrect assumption that was made that dividends would be paid on shares that are not vested. And that's absolutely incorrect. That's not our practice -- sorry, our policy. So there's a whole lot of things in this thing that led to a recommendation to vote against the remuneration report that was fundamentally flawed. And I have a lot of sympathy for the legislation that was proposed more recently about requiring proxy advisers to engage with companies on the outcome of the research before the report is issued because this is flawed. So unfortunately, that's led us to the situation where we may well have a strike against us. Disappointing, but as I said, we're absolutely sure that in doing what we've done, we've done the right thing for you as shareholders. And I just hope that you can understand that. Thank you. So look, as a reminder, if you haven't cast your vote on the resolution, you can do so now. On the screens behind me, you will see the displayed proxy voting outcome for this. And you'll see that we are just below the 75% mark. That moves us then to the next item of business, Item 4, which relates to the advisory vote on climate change. This item asked shareholders to support the climate transition approach described in the Santos' '22 Climate Change Report. The report takes into account the feedback from shareholders, and it lays out our Paris-aligned plan to achieve: one, our increased interim Scope 1, 2 and 3 targets for 2030; and secondly, our Net Zero Scope 1 and Scope 2 target by 2040. Last year, also addressing feedback from shareholders, we announced our intention to provide a nonbinding advisory vote on the company's climate change report at this AGM. The Board has been very clear that we're not asking shareholders to take responsibility for formally approving or objecting to our climate strategy. That's a legal responsibility of the Santos Board and management. A detailed explanation of this item is set out in the notice of meeting. In summary, our climate transition initiatives include $110 million for the sanctioned Moomba CCS project, a cumulative $400 million for a series of proposed energy efficiency projects and potentially $3.1 billion to $5 billion for CCS and clean fuels hubs out to 2030. The potential capital investment in the climate transition initiatives is consistent with Paris-aligned pathways. This year, Santos modeled our benchmark portfolio, 3 IEA scenarios, including the Net Zero by 2050 scenario and the IHS' market 1.5-degree scenario and accelerated CCS scenario. In all scenarios modeled, Santos achieved our 2030 emissions reduction targets and Net Zero by 2040. In the IEA step scenario, which reflects the 2021 climate change policy settings around the world and announced policies, Santos is 30% more value accretive compared with the benchmark portfolio. Even in the 2 IEA and IHS 1.5 degrees scenarios, Santos' valuation remains strong, ranging from 10% below to value neutral with the current benchmark portfolio case. Our infrastructure position, natural gas and carbon storage resources and access to good renewable resources in our asset areas position Santos well to develop CCS and hydrogen projects. Combined with our existing adjacent customer base and our adjacent -- and the adjacent skills of our workforce, contractors and suppliers, Santos is in a very strong position to be a leader in the energy transition and deliver superior shareholder returns in the future. So I'll now take questions on this item.

James, are there questions from the room?

Chair. There is one question from the room from Will van de Pol.

Just another quick question for me. Just relating specifically to the Scope 3, what you refer to as a target. I'm not sure I can really get on board with that language considering it's a commitment to work with customers to reduce their emissions, which doesn't actually guarantee Santos' Scope 3 emissions come down. I'm leaving that aside for 1 minute. The metric of 1.5 million tonnes of carbon dioxide reduced from that approach, how does that compare to the increase in Scope 3 -- or Scope 1, 2 and 3 emissions that will be generated from Santos' increasing production plans over the next decade or so?

Just to give you a sort of a scope for the 1.5. So the reason we targeted 1.5 million tonnes per annum by 2030 is through the supply of clean fuels. And you'll see in our climate transition action plan that on the back of our CCS at Moomba, which underpins a hydrogen plant at Moomba that would be transforming gas to hydrogen in the process producing CO2 that will be stored underground, a 400 tonne per day hydrogen plant is the objective. The emissions that would be reduced through the hydrogen coming from that plant is 4.5 million tonnes. So in that target is actually a target to implement hydrogen by 2030 at Moomba. And in that process, also create a market for hydrogen. Quite honestly, today, we can't get a customer to commit to that. We're working with customers to help them understand the cost of hydrogen and how they might be able to use in their business. But there's a lot of things that we need to do to create that market for hydrogen going forward. I understand what you're talking about in terms of the broader Scope 3 targets, and it's something that at the right time the Board will consider. But right now, there are so many different options that we're pursuing about reducing emissions that it's very difficult to set that longer-term sort of aspiration with confidence.

It's the right time not 2 years after 50% of -- 43% of shareholders voted for a Scope 3 emission reduction target? How much longer do we need to wait?

We're not -- I mean, I think we've had a track record of actually making commitments when we're actually clear that there is a genuine pathway there. And I'm very conscious to avoid the sort of accusation of kind of green washing in this space. We're doing a lot of stuff. This -- we talked about the work that we're doing on direct air capture. We talked about carbon capture and storage and then tying that to hydrogen. We talked about the 3 hubs that we intend to sort of set up that we're aiming to set up around Australia. All of those will reduce our Scope 3 emissions. We have customers talking to us about bringing their CO2 from their country to us to store as a CO2 service. All of those things will bring down Scope 3 emissions. When we have a clearer line of sight on those things, we will revert on the Scope 3 target. I think what I've heard from shareholders in my discussions over the last month, where I've spoken to many institutional shareholders is, we can do more to explain to you in our climate change report more explicitly what we are doing in that space. But our investors typically are quite understanding of the difficulty of setting a target in an area where you actually don't control. These are customer emissions at the end of the day. It's their Scope 1 and 2, which is our Scope 3. In that regard, we have changed our policy around climate change, and we will only sell our products to countries and customers that have Net Zero targets by -- in line with the Paris agreement. So I think that's a real strengthening of our policy in that sense as well because our customers' Scope 1 and 2 emissions are our Scope 3.

Yes. And just on those customer Scope 1 and 2 emissions. I mean my initial question was about the comparison between the reduction in emissions from the 1.5 mega tonne target compared to the increase in emissions from Santos' increasing production plans. Because using the conservative estimates from the Grant Samuel independent expert report from the merger documentation, it looks like Santos has increased production -- plan to increase around 17% to 2030 and a commensurate increase in emissions would be above 7 mega tonnes per annum. So we're talking about a 1.5 mega tonne reduction compared to a 7-plus increase. So a scope-free approach, which involves increasing emissions significantly over the next decade isn't really an emissions reduction approach, is it?

But I did talk to you also that we're not just talking about a 2023 target. We're progressing -- and we're trying to progress 3 hydrogen hubs in Australia. The first of those falls in prior to 2030, but there are 3 others moving on in parallel with that. In our plan, we also talked about direct air capture. We know today that direct air capture is commercially viable because Occidental are about to take FID on a 0.5 million tonne first phase direct air capture plant. If you look at the carbon pricing associated with some of the scenarios, even with the sort of the worst technology going today, carbon capture and store -- sorry, direct air capture is economically viable in the 2030s. We're hoping to do that earlier and bring it forward. But -- and that can create a sync that can address not just Scope 3 emissions from our customers, but other very hard-to-abate emissions. So look, we're working on a whole number of fronts here to not just address our emissions but to address emissions more generally through providing a service of cleaner fuels, clean fuels and also emissions reduction services.

I'm just completely confused how creating hydrogen opportunities can, in any way, reduce the increase in emissions through the other opportunities in oil and gas, new build, new projects that you are facilitating there, 2 completely different things.

Well, not really. Because we're looking at decarbonizing our existing business using...

So displacing the demand for the products that you're trying to sell on the other hand?

Sorry, displacing?

Displacing demand with hydrogen, displacing demand for your oil and gas. That's the only way -- you'll be increasing those production plans in the hope that there is increasing demand for them, but at the same time working to decrease demand? I'm really confused with that.

No, no. We're actually -- we're not doing this to replace it. We're actually using our products to create hydrogen. We're transforming our hydrocarbon products into hydrogen so in that process -- and in that process, we're creating a clean hydrogen fuel because we're capturing the CO2 emissions that are associated with the production of hydrogen. And so in doing that, we're addressing the Scope 3 emissions of our customers.

Okay. I don't think we can refer to hydrogen produced using gas as clean hydrogen. There's no way that those 2 things can be...

I think you're totally wrong. In fact, we've done the engineering work on something like that. We know that if we're capturing the CO2 that's coming out of the process, which is a pure stream of CO2...

Can I just add? The IEA referred to it as clean hydrogen. And the IEA estimated that 40% of hydrogen in the net 0 scenario by 2050 will be made from natural gas. And then it's 0 scenario that you keep referring to.

Yes, that same scenario that shows your current portfolio of oil and gas declining in value by about half by 2030?

You saw the valuation does not show the value of the company going down by half. It shows it going down slightly, but not by half.

The value of the current portfolio, the proportion of that chart that was in dark blue declines by about half.

As it's replaced by other products.

By clean fuels.

And okay, last question here. Can you just provide a breakdown then of the spending plan CapEx?

Well, I think it's important for shareholders that you do acknowledge that Net Zero has 40% of the hydrogen in 2050 delivered by natural gas.

In that scenario, yes, but that's not a positive outcome. That's not a green hydrogen scenario either way.

And why is it not a positive outcome if it eliminates Scope 3 emissions? And this is the difference between ideology that's about 0 emissions versus Net Zero emissions, and it will hold up the transition. It already is holding up the transition. The world has a capability to make hydrogen today, but it's unaffordable. And the only way it's going to be economic at scale is if we use natural gas to get the market developed. Otherwise, you'll just put it back 10 years.

I'm not going to stand here and have a conversation about green. Clearly, green hydrogen is the preferred option there, so that's fine. The question specifically around the breakdown of CapEx directed to hydrogen and clean fuels compared to new oil and gas production over the next decade, very rough ballpark figure, if you can provide that for me.

I think we've provided the ballpark figures in the climate change report. We're saying that in the order of $3.5 billion to $5 billion between now and 2030 will be spent on the CCS hubs, which underpin that hydrogen develops. And the first of those hydrogen projects would be in place by 2030 at Moomba.

And compared to the new oil and gas spend?

It's detailed in the report.

Sorry?

It's detailed in the report. It shows you that spend in the report.

Okay, thank you. Are there any questions on the -- written questions submitted via the Lumi platform.

Chair, the first question is from Mr. Thomas David-Swan. The 2022 Santos Climate Change report claims that all of Santos' proposed new oil and gas production projects are consistent with the IEA Net Zero scenario. The IEA Net Zero says no new oil and gas projects are built and LNG exports from Australia more than half by 2035. In this scenario, CCS is not used to expand new fossil production. How is Santos' plans to increase production consistent with the IEA Net Zero scenario?

As I said earlier, the Net Zero scenario is just one of many scenarios, but let's talk about that scenario. Even in the IEA report, and I hope you've read it because I have, it's quite clear that some $10 billion of investments required -- sorry, trillion, I said billion. $10 trillion needs to be spent between now and 2050 to maintain the energy that's required for the transition. If there is no further investment in oil and gas production going forward, the oil production actually falls off a cliff. And there is not enough energy for the planet to make the transition. It's detailed quite clearly in the report. And the funding that's required between now and then is not insignificant, $13 trillion.

The next question is from Peter Wills. I'm a landholder affected by the proposed Queensland Hunter gas pipeline in New South Wales, proposed to pass near but not connecting to the Narrabri gas project. How do you expect to establish the Narrabri gas project in its phased approval with the significant landholder opposition to both the Western Slopes Pipeline and 100-plus landholders there who won't allow a spade to enter their land to build that project or the 500-plus landholders highly opposed to hosting the Hunter gas pipeline? Are you pursuing a connection to the proposed Hunter gas pipeline for the missing 25 kilometers to that option? How do you now anticipate exporting the gas from the Narrabri region?

Yes. Well, as I said earlier, we're actually -- we're drilling appraisal wells later this year. Then the process would be to actually understand the resource and put together a plan that would actually outline how that could all be developed. But some sort of screening thoughts have been put together, and I think Kevin can talk about that briefly.

Well, we've got an agreement with EPA to -- for a potential development of a pipeline running Southwest from Narrabri to connect into the Moomba to Sydney pipeline. The Hunter gas pipeline is a separate project that's already approved and could connect that Narrabri Gas Project. So we have options, and ourselves and our customers will ensure that we are delivering the lowest cost pathway to market before we make that final decision.

I just remind shareholders that the questions here should be really directed to the climate change report that a question relating to Narrabri line should probably been dealt with earlier in the meeting. Any questions, James?

Chair, the next question is from Peter Wills. The Oil Search and Santos merger update dated 11th November 2021, throws considerable doubt on the ability of Santos to extract 70 PJ of gas per annum from the Narrabri Gas Project. And instead, the Grant Samuel expert report indicates that the project is likely to achieve a maximum of only 40 PJ per annum for 6 years. The merger update also refers to a major review of the project in June 2019 that resulted in a revised project development plan that contemplates only 400 production wells over 25 years. Does the revised project development plan downgrade the likely annual production from the Narrabri Gas Project from the 70 PJs put forward in the Narrabri Gas Project EIS? And if so, what is the revised annual production rate and total production estimated from the review? Doesn't this suggest that Santos has been misleading the market through the EIS process by claiming far greater resources were available and withholding information about the problems?

Look, I think Kevin has already dealt with that question as part of the earlier session around the financial report and the general operations of the company. So I think at that point, we dealt with why we're where we are in terms of the production volumes that we're targeting. It's kind of very clear about the economic attractiveness of the project as well. So I don't really think there's any point taking that question any further. I think we've already dealt with it. Next question, James.

The next question is from Mr. Daniel Joseph Gocher. How many Santos directors have working experience with renewable energy, storage or energy not derived from fossil fuels?

I have. So I can tell you that. I think Mike has and Eileen. So 3 of us. Santos, of course, I should say we actually generate quite a lot of electricity in our own business. We have -- in fact, we'll be tomorrow down in Polpaifhand visiting the solar farm there. We've got solar panels on a whole lot of our pumps out in the Cooper Basin. And in fact, we'll be doing quite a lot of work around sort of further electrifying our business, and a big chunk of that is going to be through solar. So yes, there's -- within the company and also on the Board, there is a lot of experience in renewables. Next question.

Chair, the next question comes from the phones and comes from Kara Kichler on traditional custodians. Go ahead, Kara.

I was wondering if Santos was aware of the fact that the United model process does not allow -- all right, I've got doubled. Give me 1 second.

Chair, unfortunately, we've lost the feed. The next question comes from the phones and comes from Charlie Cox on sacred sites. Go ahead, Charlie.

Can I just remind Charlie and others before they ask these questions, this is -- we had a resolution here about our climate change action plan. And if the question is not kind of related to that, I think I'd actually ask you to perhaps record your question with James and we'll undertake to get back to you with our answer.

In that case, Chair, we have no further questions on this item.

Okay. Thank you. So look, if you haven't cast your vote on the resolution, you may do so now. On the screens behind me, you would see displayed the proxy voting outcome for this item. I'll now turn to Item 5, which relates to the grant of share acquisition rights to Mr. Kevin Gallagher. This item asks shareholders to approve a grant of share acquisition rights to the Managing Director, Kevin Gallagher. A detailed explanation of this item is set out in the notice of meeting. The performance measures are consistent with last year's grant, consisting of 4 tranches each, providing for 25% of share acquisition rights. The Board has maintained the more challenging free cash flow breakeven point performance measure set last year of equal to or below $25 per barrel of oil equivalent to achieve full vesting. The Board is confident that the targets for the CEO's share acquisition rights are aligned with shareholder interests. I'll now take questions on this item.

James, are there any questions in the room?

Chair, the first question in the room is from the Australian Shareholders' Association.

Excuse me, Chair, my feet had gone to sleep sitting.

Been a while, hasn't it?

I want to thank you for meeting with us within the last month. And before I go on, make a fair well best wishes to Mr. Hock, who's been with us for a long while. 12 months ago, when we met with you before the AGM last year, the first item on our agenda dealt with rumors that a larger Australian hydrocarbon company was head hunting Kevin Gallagher. And we expressed considerable concern that when these very senior executives move, they're likely to take a team with them. And we saw that as quite disadvantageous to Santos should it occur. We made it clear, without trying to pressure you -- we made it clear that we would understand moves taken to make sure that Kevin Gallagher was kept on Board. For that reason, we support the motion that's currently before us. And if you'll indulge me for 10 seconds, our members in the Australian Shareholders' Association do like us to say, which way we are voting on all items. And for all items up to including 7, we are voting For, and we're voting Against only Item 8. There's been concern expressed about the amount of the -- for this resolution. We were not concerned and you have given a good explanation about ISS and its position, so I won't take that matter any further. But I was coming into the meeting with some detailed questions, but I think you've really addressed the matter.

Thank you, Bill. Okay, there are no more questions in the room, I believe. James, are there any questions online?

Chair, there are no questions online or on the telephone.

Thank you. I'll ask you now to cast your vote if you haven't really done so, and voting will close at the conclusion of the formal business. On the screens behind me, you'll see displayed the proxy voting outcome for this item. I'll now move to the next item of business, which is the issue of shares to satisfy the growth incentive to Mr. Kevin Gallagher. I think the item you referred to are above. This item asks shareholders to approve the issues of shares to the Managing Director, Mr. Kevin Gallagher, to satisfy any vesting of share acquisition rights granted under the projects -- the growth projects incentive. A detailed explanation of this item is set out in the notice of meeting. In the April 21, the Board awarded the Managing Director and CEO once-off incentive to ensure that Mr. Gallagher sees through successful delivery of Santos' major projects and our critical energy transition. Mr. Gallagher is well recognized as one of Australia's leading chief executives with a proven track record of increasing the company's value and delivering shareholder returns, and we believe he's uniquely placed to lead Santos through this period of transition to a clean energy and clean fuels company. The incentive has got a strong weighting towards climate-related metrics, including 40% for carbon capture and storage targets and progress towards Net Zero Scope 1 and 2 emissions and new energy business development, which supports the energy transition and progress on a commercial-scale hydrogen or downstream clean fuels project. These activities are critical. They're a major part of our Net Zero by 2040 commitment and our strategy of being a global leader in the affordable, cleaner energy and clean fuels area. The once-off incentive was provided wholly in the form of 847,458 share acquisition rights granted under the Santos Employee Equities Incentive Plan. And it was calculated by dividing the maxim award quantum of AUD 6 million and USD 6 million by the volume weighted average price of Santos' shares for the 5 trading days up to and including the 9th of April 2021, and that was $7.08. The share acquisition rights are 100% at risk, and vesting will be determined following an assessment of delivery against strict performance conditions which were published in the 2021 annual report and continued employment at December 31, 2025. The Board will review the performance annually as part of the CEO's performance assessment, and progress against delivery will be reported annually via the remuneration report. I'll now take questions on this item. James?

Chair, there are no questions in the room, but there is one on the Lumi platform from Mr. Alexander Emerson Hillman. Yesterday, it was reported in national media that a Santos staff survey deemed Santos management, led by our CEO, Mr. Gallagher, as ineffective and untrustworthy. The justifications from our Chair around the complex business environment and COVID-restricting face-to-face contact are not unique to Santos. Yet our staff survey results were below industry benchmarks. At a time when the social license of oil and gas companies is declining, which is affecting recruitment and retention, what is our CEO doing to address the results of this survey?

Okay. I'll just give you a little bit more context to the survey, and then I think Kevin can make some comments about what we're doing. I've kind of covered this sort of situation. What I didn't expand on was really the -- our target there was to actually conduct a survey in the first half of 2021. That was literally several weeks after we just completed the acquisition of the Northern Australian gas assets from ConocoPhillips. So we had a bunch of people coming on board -- a large number of people coming on board, who actually were totally new to Santos and really uncertain about what their kind of future was going to be. So that was a big contributor to the survey. If we actually teased the survey apart and look at the Santos -- kind of heritage Santos people, the people that have been in the organization for a long time, the actual survey results had improved over the previous survey results. And as you'd expect with any of these surveys, there were hot spots. And those particular hotspots have very specific issues that we've actually developed plans to target and address. Look, I'll pass this over to Kevin, but this wasn't an unexpected result for us. And we could have actually decided to defer the survey because of all this sort of uncertainty that was created at that time. But we felt there was more value in people letting us know what the issues were than actually kicking the can down the road. And so that's why we proceeded with the survey. We got not an unexpected result, but we've got really rich data that's enabled us to develop a plan to address those cultural issues. Kevin?

Yes. Look, I think -- yes, I think what I'll just say to add to that is that number one, as a CEO, you get very concerned when you see anything go backwards in any sort of cultural survey. We have many different measures of cultural climate within the organization, and the staff survey is just one of those tools. It's fair to say that on some metrics we had gone backwards. And I would say, overall, we've gone slightly backwards from the 2019 staff survey. We do these every 2 years. However, it was still better than the 2017 staff survey. So it wasn't like a major regression beyond where our starting point was, but not unexpected for some of the reasons that Keith mentioned. I think more than just the impacts of COVID and particularly on our people who have had really severe impacts on the lifestyles. I mean to live away from home for very long periods of time, not only as you would think about the border closures, but we've got people who work at Bayu-Undan, for example, who because it was outside of Australia, it's in Timor Leste waters, when they came back into Australia and to Darwin would have to quarantine for 2 weeks. And then WA would make them quarantine again for 2 weeks, even though they'll come out of quarantine in Darwin. So these people could be away from their families for 10 or 12 weeks at a time. So it's very stressful and very difficult for a lot of employees. And we do lots of things to try and help manage that, but you still cannot get away from the fact that it puts a lot of stress on families and a lot of stress on individuals. Retention has been very healthy throughout. So one of the key measures of culture and an unhealthy culture, you see very, very high turnover rates in your staff. And we've still got relatively healthy retention levels, very high retention levels across the organization. And in that particular article that was in the press, of course, not only did I read it, but many of my staff pointed out to me over the last few days, as you can imagine. It should be noted there were many positives that were not mentioned in that survey. Safety, we always perform at the very top of the benchmarks in safety culture. And that's one of the first things as a CEO in this type of organization that I'm very focused on and that you want to look at. But also in areas like alignment and understanding of strategy and vision of the organization. Those are real measures of leadership and how leadership reviewed. And the term leadership, when the question about trust and leadership was quoted in the article, the term leadership is a broad term. And you should not just jump to the conclusion that, that's executive leadership. There are many levels of leadership in very large organizations like Santos. What are we doing about it? We have reviewed those results. We've reviewed them with the Board. We've reviewed them with management. We put action plans in place, awareness and programs -- and training programs as well as leadership development programs to help improve the capability of our leadership from middle management up to better manage and particularly coming out of the pandemic. What I am optimistic about, as we'll get much more face time whether our organization with the people across our organization, now that we can travel across borders and spend more time around the different states where we have a lot of our people. We now have over 1,000 people in PNG. We have 500, 600 people in WA. We've got around 800 to 900 people here in Adelaide. If you count all the South Australian workforce, that's over 1,000. We got 600 people up in Queensland and Brisbane. So we've got a very diverse and distributed workforce that really were kept apart for the best part of 2 years, and that's been very difficult in the organization. And I acknowledge that. And Alaska, of course. Sorry for the guys in Alaska listening. And I didn't mean to forget about you, but we've got a new workforce in Alaska as well.

Okay. But look, thanks for the question. It was -- I think it was a good question to ask, and hopefully, that satisfies you.

Chair, there are no further questions from the Lumi platform or on the phone.

Okay. Thank you, James. All right. As a reminder, again, that you can cast your vote if you haven't already done so. So on the screens, you'll see displayed the proxy voting outcomes for this item. I'll now move to the next item of business, which relates to the director fee pool. This item asks shareholders to approve an increase to the aggregate amount of remuneration that may be paid to nonexecutive directors in any financial year. A detailed explanation of this item is set out in the notice of meeting. It's proposed to increase the maximum aggregate amount for nonexecutive director fees in the financial year to AUD 3.5 million, an increase of AUD 900,000 on the previously available fee pool. This proposal follows an external review of director remuneration fees, which were benchmarked and then comparison of fee pools with similar companies. The details of the fees paid to nonexecutive directors were provided in the remuneration report in the 2021 annual report, where it also outlines the fees proposed from the 1st of January '22. The proposed increase fee pool will also accommodate the appointment of additional Board members. So we've gone up from a Board of 8 now to a Board of 10, following the company's merger with Oil Search, and it ensures that fees can continue to be set at competitive rates to attract and retain nonexecutive directors with the necessary qualifications and experience. The increased fee pool will provide flexibility to allow for fees to increase over time. It's not intended to distribute all of the proposed fee pool in the current year. I note the fee pool hasn't been increased since the 2013 Annual General Meeting. I'll now take questions on this item.

James, are there any questions in the room?

Chair, there is one question in the room from the Australian Shareholders Association.

Thank you.

A brief question inviting a brief answer, Chairman. It's getting late. You did say that you would distinguish between U.S. dollars and Australian dollars, and it would -- and if Australian dollars were being used, you would say so. I noted in preparing for this meeting and writing our voting intentions for our members to read that directors' fees are expressed in the annual report and in the intended future in the notice of meeting in U.S. dollars, but the $2.6 million figure from the upgrade from $2.1 million that was approved in 2013, and I did go back to have a look, that's in Australian dollars. And I'm assuming that the $3.5 million is also in Australian dollars. An easy question, would you please confirm that?

That's correct, yes. But thanks for pointing that out. I guess that's something that's kind of occurred with the passage of time between the notice of meeting and the issuing of the annual report. And apologies for that. I'll now take any written questions submitted via the Lumi platform. James, are there any questions?

Chair, the first question comes from Mr. Stephen David Mayne. Now that Santos is a $27 billion company, thanks to the Oil Search merger and Putin's invasion of Ukraine, if this fee cap increased from $2.6 million to $3.5 million is approved today, what is the actual plan in terms of increasing the fees paid to individual directors? Was the current fee cap of $2.6 million one of the reasons that Michael Utsler is only joining the Board today, unlike the other 2 Oil Search directors who have been receiving fees since joining the Board on December 17 last year? If this wasn't the reason, why didn't Michael join the Board last December?

Okay. Let me deal with that, with Michael first. I mean, basically, our constitution has a limit of 10 directors on the Board. Santos already had 8 directors on its Board, so basically, what we have done is we brought 2 Oil Search directors on immediately, and that was Musje and Eileen. Mike has attended our meetings as a director, and we've remunerated him as a director as an observer in that period of time. With the retirement of Hock at this meeting, it now allows Mike to join the Board formally as a director. So there was no -- we wanted the input of the 3 Oil Search directors into the boardroom. And the way we dealt with that was bringing 2 on the Board straightaway, which hit the constitutional maximum, and then we asked Mike to attend our meetings as an observer until this point in time. And as of today, he will become -- at the end of this meeting, he becomes a Director of the Board. Your second question was around the fees and the plans. I think we've demonstrated to shareholders that we're very restrained in terms of our remuneration of directors. So director fees hadn't increased since 2013, like the fee pool. And I can tell you that in 2019, we did a benchmarking exercise, and we actually approved an increase to director fees in 2019, which we then canceled because COVID had appeared. And we thought it wasn't appropriate for us to be increasing director fees at a time when COVID was occurring. So we put that off. And then late last year, we did our benchmarking. We benchmarked against Santos at the time, not the Santos and Oil Search or merger organization. And on that benchmarking, it showed that we were seen quite low in the benchmarks between the 25th and the 50th percentile of -- closer to the 25th percentile. So on that basis, we made an increase of 8% across the board to Chairman's fees and nonexecutive director fees. We also took the opportunity to increase the fees of the committed shares to 50,000 each. Traditionally, the Audit Committee has been -- Chairman has been paid more because of the recognition that, that's a big role. But in fact, the way that the things are evolving, the time that's spent on remuneration, the time that's spent on the climate change initiatives and reports are quite substantive. And so we felt that all Chairs would be rewarded in the same way, and we made a small adjustment also to committee fees. And we took away any fees associated with the Nomination Committee. So that's the -- and in terms of plans on the way forward, I'd look to our historical practice of not claiming victory until we're absolutely sure we've locked the green. So we're not looking to make any increases in the short term as a result of the Oil Search merger. We'll do that when we're satisfied that we've really integrated that business and it's One Santos and is performing. Thank you.

Chair, there are no further questions online or on the phones.

All right. So voting on this and all other items is open, and you may cast your vote now if you haven't already done so. On the screens behind me, you'll see displayed the proxy voting outcome for this item. I now move to Item 8, being resolutions requisitioned by a group of shareholders. The first of these is Item 8A, a special resolution seeking the company -- amendment of the company's constitution. This resolution proposes to insert a new provision into the constitution which would enable shareholders by ordinary resolution to express an opinion or ask for information or make a request about the way in which the management of the business and affairs of the companies has been or should be exercised. The Board's response and recommendation to vote against this item is set out in the Notice of Meeting. In addition to our ongoing and regular constructive engagement with shareholders, shareholders already have the right under the Corporations Act to put effective resolutions to the meeting. The power to manage the business of the company is conferred upon the Board in the constitution. And it's important that the directors are able to make decision using their professional expertise and business judgment about the affairs of the company in the interest of all shareholders as a whole. Shareholders have the ability to hold directors to account for their decisions and actions by voting on the appointment and removal of directors. The Board, therefore, considers the resolution unnecessary and not in the best interest of shareholders. I'd like to now address the related Resolutions 8B, 8C and 8D, which are advisory resolutions that would only be put to the meeting if Resolution 8A had been passed. As I mentioned earlier, it's clear from the proxy instructions received that Resolution 8A will not be passed. However, I'll make some brief comments in relation to the 3 related resolutions, which will not, therefore, be put to the meeting. And I'll then invite questions on all 4 resolutions. The Board doesn't endorse Resolution 8B, which relates to capital protection. According to the supporting statement provided with the resolution, it's based on the premise that further capital investment in oil and gas development and production will be stranded. The Board doesn't consider this premise is supported by objective or comprehensive evidence. For example, even in the IEA's Net Zero 2050 scenario, an investment of $10 trillion in new oil and gas supply sources will be needed over the next 2 decades to meet customer demand. Detailed reasons are set out in the notice of meeting. We don't -- the Board does not endorse Resolution 8C, which relate to climate-related lobbying. The resolutions appears to be based on a number of premises that Santos rejects including, but not limited to, that Santos' advocacy is opposed to the Paris-aligned climate policy; that there will be no advocacy for development of new and expanded oil and gas projects; that there should be no advocacy for carbon capture and storage or hydrogen nitrate gas; that Santos advocated for weakened methods to estimate fugitive emissions of methane, which is incorrect. There's no evidence that Australian LNG produced carbon emissions in customer countries. Look, I think we've demonstrated through our annual climate change report and our climate change policy and our industry association reviews over the last years that our position on advocacy and climate is Paris-aligned. We've set out detailed reasons in our notice of meeting why the other premises in this resolution are flawed. The Board does not endorse Resolution 8D, which relates to decommissioning. The issues raised in Resolution 8D are already adequately addressed and disclosed by the company, which meets all the legal requirements in relation to reporting on decommissioning activities and provisioning. We provide fulsome independently audited disclosures in relation to decommissioning of our public annual financial reporting. Further, the resolution includes requirements to disclose commercially sensitive information that may be constituted a breach of contractual obligations. Again, detailed reasons are set out in our notice of meeting. I'll now take questions on these items. Please ensure you have submitted your votes as voting will close shortly after the conclusion of questions and answers on these items.

So James, are there any questions from shareholders in the room?

Chair, there is only one question from the room, Will van de Pol.

I promise I'll keep this one quick.

That's what you said last time.

There are a few things that needed to be discussed. Just want to talk a little bit about the picking and choosing elements of the IEA net scenario that we've been talking about. So we talked about the hydrogen element a little bit before you talked about the $10 trillion required in investment in supply. But the key finding of that IEA Net Zero report is that no supply from new fields other than those that have already been approved for development in 2021 are required under that Net Zero by 2050 scenario. So the new fields which Santos is intending to develop are not consistent with that Net Zero scenario. Can I just get a comment on that, please?

Well, I think you'll see that we've been progressing in the development of Dorado, the Papua LNG project has been on the table for a long period of time. The Alaskan project has been on the table. These are projects that have been progressing and have been taken into account in their modeling. So I really -- I don't see any inconsistency there with that. They're talking about developments that are existing. Discoveries that are already made and no further exploration is really required. What they're also making quite clear is there is need for further developments to take place to replace declining production to meet energy demands between now and 2050.

But not from new fields that are not already approved for development?

Not all the new fields are approved for development. We're seeing right now the issue that some of the fields that were approved for development haven't been developed because of uncertainty.

In my discussions with IEA, that's not what they intended that to mean at all. They meant no new exploration. There's enough discovered resource to meet their requirements for oil and gas, yet to be developed resource to meet their requirements for oil and gas demand between then and 2050.

And does Santos have any CapEx plans on exploration outside of those resources that have already been explored for?

We'll be doing exploration around our existing hubs because the whole point of the IEA thing is about we'll need to be continuing to extend the life of existing but not looking for sort of totally new provinces and new sort of areas. So that's the sort of premise, I think, of the IEA scenario.

In short, Santos believes that all its exploration and development plans are consistent with the IEA Net Zero by 2050 scenario.

Our current plan absolutely, near field, yes. Yes.

I'll now take questions submitted via the Lumi platform. James, could you read the first question?

Chair, the first question comes from the Australasian Center for Corporate Responsibility. ASIC is encouraging all ASX-listed oil and gas companies to reflect on the appropriateness of their decommissioning provisioning and disclosures. Compared to peers, Santos discloses significantly less detail on the assumptions and assets driving its decommissioning provisions. Why are you resistant to lifting the level of disclosure to enable shareholders to better understand this material risk when your peers have demonstrated it is possible to do so whilst also managing commercial sensitivities?

I think you talked about a very specific case in -- when you're talking about peers here, and we're aware of that. Look, let me just back up a little bit because we're a different business to many of our peers in the sense that we have a big onshore element to our operation. We have a very proactive approach to decommissioning. And in our sustaining CapEx every year, there is a decommissioning sort of allocation. We've appointed a Vice President of decommissioning in the course of last year. And he has a team of decommissioning sort of experts with him that are continually working on decommission. So we take a very proactive stance on decommissioning onshore. For offshore decommissioning, I think as we mentioned earlier, it's actually -- we're looking at re-purposing facilities. So in the case of Bayu-Undan, we may not be decommissioning that facility. We may well be re-purposing it and using it for carbon capture and storage. I think at the moment, our base case is that we do carry an abandonment or a decommissioning as the base option. But until that project is approved, in which case the decommissioning would change. It introduces potentially a kind of a volatility into the sort of scenarios if we were to get down to that sort of level in consolidation of our decommissioning obligations. I think that absolutely meets everything that shareholders could possibly need. It's independently verified by engineering sort of experts, not from Santos but engineering. These plans are checked. The restoration obligations are prepared for us on an asset-by-asset level, but we roll it up in accordance with the guidelines of the accounting standards. And we report those to shareholders in our half year and full year results. So I think shareholders have more than enough information on the decommissioning requirements and provisions at Santos. But let me just reiterate, we do take a very proactive view on decommissioning in the company. And in fact, we get -- we receive a weekly report. The Board receives a weekly report from Kevin. That includes a report on decommissioning activities that are being carried out during the week. So the Board is kind of focus on these activities as well. James?

Chair, the next question comes from the Australian Center for Corporate Responsibility on Item 8D. Santos has been open about its pursuit of CCS as a strategy to delay the decommissioning of end-of-life assets, such as Bayu-Undan. Are you able to provide any insight to your decommissioning plans for Bayu-Undan if the CCS project is deemed technically or commercially unviable?

I think I just did. Our base case is that we would decommission those facilities. We'll proceed with the -- if we perceive the CCS project, then we'll be investing in some additional equipment, et cetera, out there and re-purposing that facility for CCS. I do object to the language that talks about us using CCS to delay. That seems to be quite disingenuous. We're actually using CCS as a way of reducing our carbon emissions. We are fortunate as a company that we have a number of assets that are at the end of their not life or very near the end of their field life and that we have the opportunity to re-purpose those facilities for carbon capture and storage at commercially-attractive rates. Our project in Moomba is recognized as the cheapest. Cheapest is not the right word. Lowest-cost CCS project in the world. There are plenty of CC U.S. projects that seek to do things like enhanced or recovery. But in terms of those projects that are purely carbon capture and storage projects, ours is the cheapest. And we do that because we're able to re-purpose facilities in appropriate locations and use them, extend their life. And actually, as a result of that, be able to accelerate our decarbonization of our business. Thank you.

Chair, the next question is from the Australasian Center for Corporate Responsibility. APPEA is opposed to the electrification of domestic cooking and heating. Does Santos agree with this advocacy? If Santos is simply meeting a demand, why is it funding advocacy aimed at propping up demand?

I don't believe we are all in favor of electric cooking. I have an induction oven, and it's pretty fantastic. Look, we go through a process every year of assessing the companies that we're members of, for their alignment with the Paris principles. In fact, I think as a result of that review that we did last year, we actually ceased our membership of 1 organization. And we continue to do that. And I'm -- I think we're very comfortable. I mean, Kevin can maybe talk about it in a bit more detail because he was the Chairman of APPEA for a period of time and probably knows about that position better than I do. But look, can we provide you with a bit more detail in future on that report that give you more confidence potentially that we're complying with the policies potentially? So it's something that we can kind of look at, I think, kind of going forward. But I am confident that we are genuine and that we do look at our memberships and then we do look at whether they comply with the Paris -- the intent of the Paris Agreement? We are very confident about that. Kevin, do you want to make a comment about it?

Nothing really to add. I mean I was chair of APPEA for 2 years with the primary intent of making climate change the top priority of the APPEA Board, and I was successful. I felt achieved that, which is why I stepped down from the chair last year and stayed on the Board. I'm not aware of any advocacy policy of APPEA that is anti-electric cooking. And that will be quite specific. And I don't think that's a policy that APPEA has. They would be pro-gas but they are very much pro emissions reduction as well. And so yes, I'm not sure where that's coming from. That's a question for APPEA Board. And I'd advise anybody who's got a question for the APPEA Board to pay membership fees. We could do with your membership and join and ask questions at the APPEA Board members -- the board meetings.

Okay. James?

Chair, there are no further questions on the platform or on the phone.

Excellent. So as a reminder that voting will close shortly. You should cast your votes on all resolutions now if you haven't already done so. On the screens behind me, you will see displayed the proxy voting outcome for these items. In the interest of transparency, the results of the directed proxy voting for Resolutions 8B, C and D are also displayed on the slide behind me. So ladies and gentlemen, thank you for your patience. That completes the formal items of business for the '22 Annual General Meeting. If you haven't already done so, you can please enter your votes now because I'm about to declare that all voting on items is closed. [Voting]

For those of you attending here in Adelaide, light refreshments, I hope, will still be served in the foyer, where registration was set up prior to the commencement of the meeting. Thank you for your time. Thank you for your questions and for your continued engagement and support in these challenging times for everyone. I now formally declare voting on all items of business closed, and the meeting closed subject to finalization of the polls on each item of business. Thank you.