Abu Dhabi National Oil Company (ADNOC) is preparing an $18.7 billion bid for Santos, Australia's second-largest gas producer. The bid has raised concerns among Australian regulators regarding local gas supply, particularly as the country faces a potential gas shortage by 2027. Santos shares closed at A$7.73, significantly below the proposed bid price of A$8.89, indicating investor skepticism about the deal's regulatory approval. It is suggested that while the bid is attractive, the regulatory landscape may complicate the acquisition process.

Some believe that ADNOC's financial strength could help it navigate regulatory hurdles. The consortium's commitment to accelerate the development of Santos's undeveloped resources, such as the Narrabri project and Beetaloo shale gas, may appeal to regulators concerned about domestic gas supply. The deal's significance is heightened by a recent trade agreement between Australia and the UAE, which could influence the approval process. The outcome of this acquisition could reshape the competitive landscape in the Australian energy sector.