31-03-04 Oil and gas giant Santos wants to expand into the Middle East and North Africa in a search for new profit-growth engines. South Australia's biggest company also plans to increase its presence in South-East Asia and North America over the next two years, further reducing its reliance on its core Cooper Basin business in South Africa and Queensland. In its annual report, Santos says the Middle East and North Africa were focus areas in an effort to build a long-term growth portfolio over the next 5 to 10 years.
"Santos is currently awaiting the outcome of two bid submissions: an oil-development opportunity in the Middle East and a multiple exploration and development project onshore North Africa," the report says.

Both regions had "large proven potential" and were a natural fit with the company's existing skills, such as operating in desert environments, it says. Managing director John Ellice-Flint says in the annual report Santos has six "company-building projects" in the pipeline. Three already have been approved and the remaining three -- offshore fields in Indonesia, Victoria and Western Australia -- should be approved this year.
"We are intent on developing Santos into a growth company and we are accelerating the pace of change," Mr Ellice-Flint says. He says that between 2004-06 Santos would build its position in South-East Asia and North America by expanding its exploration acreage and making acquisitions.

Santos has been under pressure since reporting a flat $ 327 mm annual profit in late February. Its share price has been hit by the January 1 fire at Moomba, a lack of exploration success in 2003 and forecasts of weaker petroleum production this year. Mr Ellice-Flint says in the report there is a strong outlook for the company's petroleum production growth from 2004-08.
"While Santos's total production is expected to decline in 2004, this will be arrested from 2005 as new projects, many of which are already sanctioned, come on line," he says.

The annual report says Mr Ellice-Flint's pay packet in 2003 totalled $ 4,426,350. This included base remuneration of $ 1,101,923, a $ 1.2 mm bonus and more than $ 2 mm in other benefits such as superannuation and the value of options and shares previously granted by the company.
Santos chairman Stephen Gerlach says in the report the company expects to maintain its current level of dividend payments -- a yield of almost 5 % -- for "the foreseeable future".