Santos' plans to increase gas production have been given a tick of approval by shareholders after a protest vote against the fossil fuel giant's board failed to eventuate.
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Shareholder activist groups encouraged investors to vote down the re-election of chair Keith Spence and board pay at Thursday's annual general meeting over concerns about Santos' profitability and environmental impact.
The company is pushing ahead with several new gas and oil extraction projects, including the Barossa gas field off the coast of Darwin and the Narrabri gas project in northern NSW, which has drawn the ire of environmental groups.
Mr Spence told investors the Barossa project was now 70 per cent complete after costly legal delays, with first gas expected in the third quarter of 2025.
Santos' strategy to increase liquid natural gas production is essential to help the world decarbonise by providing a cleaner alternative to coal, said chief executive Kevin Gallagher.
He welcomed the Albanese government's manufacturing and clean energy investment plan, announced on Thursday, but said Santos would focus on building a resilient business model that does not rely on subsidies or handouts.
"That said ... to get the best impact for Australia to incentivise true transition, it needs to be technology agnostic and sector agnostic, to encourage every sector of the economy to decarbonise," he said after the meeting.
A major part of Santos' decarbonisation strategy is increased investment in carbon capture and storage (CCS).
Mr Gallagher said the company's Moomba CCS project, which it claims will be able to store 1.7 million tonnes of CO2 per year, is months away from starting.
But critics have questioned the viability of CCS and claim increasing gas extraction will only accelerate carbon emissions and exacerbate global warming, while also damaging Santos' share price.
The Australasian Centre for Corporate Responsibility, which is suing Santos for alleged "greenwashing" over its CCS claims, says the company's high capital expenditure growth policy has resulted in "drastic underperformance compared to peers".
Ceasing all new projects and redirecting capital expenditure to share buybacks would create an additional $US1.7 billion ($A2.6 billion) in value, said executive director Brynn O'Brien said.
Despite the centre encouraging a protest vote against Mr Spence's re-election to the board, he was comfortably supported by 93.4 per cent of shareholders, at a time when companies are facing an increase in investor activism.
Will van de Pol, chief executive of environmental advocacy group Market Forces, said big investors were "wallowing in greenwash and failing to live up to their climate claims".
Market Forces was recently dragged into Santos' legal stoush with the government-funded Environmental Defenders' Office over its bid to block the Barossa project from going ahead.
The $US4.6 billion ($A7.1 billion) project was delayed by a legal challenge from the EDO, which claimed Santos failed to assess Tiwi Islander's submerged cultural heritage along the route of its undersea export pipeline.
The Federal Court eventually ruled in Santos' favour, slamming the EDO for confecting evidence and coaching witnesses.
Lawyers for Santos have subpoenaed four environmental groups, including Market Forces, to hand over communications with the EDO as the company attempts to recoup costs from its opponents.
Both Market Forces and Santos declined to comment on the legal proceedings.
Australian Associated Press
