Unit costs fall to 10-year lows
The most relevant fact of the announcement is not the 10% staff cut, but the reduction in production costs to US$6.78 per barrel of oil equivalent (boe), excluding Bayu-Undan. This is the lowest level in a decade, consolidating a low-cost operating model implemented since 2016.
The company reported annual production of 87.7 million barrels equivalent (mmboe) and sales of 93.5 mmboe, generating revenues of US$4.9 billion. Underlying net income reached US$898 million, while free cash flow reached US$1.8 billion.
From a technical perspective, these production costs confirm the soundness of its upstream strategy focused on thermal efficiency, logistics optimization and OPEX discipline.
Barossa, Darwin LNG and Pikka enter stable phase
The labor adjustment responds to the transition of large capital projects to stable operation. The Barossa Gas Project, Darwin LNG life extension and Pikka Phase 1 developments are approaching full production.
Barossa and Darwin LNG were delivered within six months of the original schedule and within budget, a key indicator of project management in complex offshore environments. The first cargo was received in early 2026.
In Alaska, Pikka Phase 1 expects first oil by the end of the first quarter of 2026, reaching production plateau before the close of the second quarter.
Moomba CCS exceeds anticipated climate goal
On the technical-environmental front, Moomba CCS has stored more than 1.5 million tons of CO₂ equivalent since start-up.
The company also announced that it achieved its 30 % emissions reduction target for 2030 five years ahead of schedule. This milestone positions the project as one of the most relevant carbon capture and storage developments in Oceania.
From an industrial perspective, the integration of CCS strengthens the liquefied natural gas portfolio and improves the ESG profile without compromising competitiveness.
Breakeven below US$35/bbl until 2030
CEO Kevin Gallagher reaffirmed the structural goal of maintaining a free cash flow break-even point below US$35 per barrel, which confirms low production costs; a goal achieved every year since 2016.
Looking ahead to 2026, Santos projects production between 101 and 111 mmboe, capital investment of US$1.95 to US$2.15 billion and unit costs between US$6.95 and US$7.45 per boe.
While large projects go into cash-generating mode, the company aims for a break-even point between US$45 and US$50 per barrel until 2030, consolidating financial discipline and resilience in the face of global energy market volatility.
Source: https://oilprice.com/
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