Whether this sale of Santos - announced yesterday - is approved by our Foreign Investment Review Board (FIRB) headed up by Treasurer Jim Chalmers is all speculation at this point. The bottom line is that this deal will only get the thumbs up if it becomes a plus for gas supply and gas bills here in Australia.

While the potential sale of Santos to a foreign-owned company is good news for long-suffering shareholders of the oil and gas business, it could be bad news for those Australians with big power bills, who could now face the problems of a poor gas supply! Think summer without air-conditioning or winter without heating. Or, if these threats are averted, think even bigger power bills!

For those not across the deal, here it is in a nutshell:

1. Along with others, the Abu Dhabi National Oil Company (ADNOC), a subsidiary of the energy investment company XRG and US private equity firm Carlyle, want to buy Santos.
2. They’re offering $36 billion or $8.89 a share, which is 28% better than its current share price.
3. They say they want to increase Australia’s supply of gas.
4. The Santos board approves the deal.
5. However, it has to be given the OK from the Foreign Investment Review Board (FIRB).
6. The South Australian government (Santos was founded in South Australia) aren’t doing somersaults over the deal.

This offer comes as Santos has recently passed a hurdle for a $3.6 billion Narrabri Gas Project in northern NSW. However, this offer has raised doubts over whether this important new source of gas will be delayed or if it would actually happen, if Santos becomes foreign owned.

That hurdle was beaten when a Native Title Tribunal ruled in favour of granting land leases to Santos, despite opposition from traditional owners and environmental groups. Supporters of the deal say ADNOC will have the deep pockets to make the Narrabri project happen and experts say their huge supply of funding could be a winning play to get the OK from the FIRB.

Interestingly, this deal could actually help us gain mor control over our domestic supply of gas.

“XRG is interested in the major LNG oil assets, they’re not interested in the relatively smaller domestic assets – that includes Cooper Basin, Moomba, Narrabri and Dorado,” MST Financial energy analyst Saul Kavonic told the Daily Telegraph’s Giuseppi Tauriello. “From a FIRB approval perspective, it might be easier to get the approval for this deal if XRG agree that they will not own these domestic assets, so they’ll spin it out to a non-foreign government owned entity.”

This is all speculation. The bottom line is that the FIRB is chaired by the Treasurer Jim Chalmers, and this deal will only get the thumbs up if it becomes a plus for gas supply and gas bills here in Australia.

You see, the Australian Energy Market Operator has warned that the east coast has a potential supply problem and Tauriello reports that “Narrabri could meet up to half of NSW’s gas needs, according to Santos, which has committed to reserving all production from the field for the domestic market.”

Without doubt, if this potential Santos sale delivers better supplies of gas to the east coast and power bill rises are contained, then this would be a political win for the Albanese Government. And if it can’t wrangle a good deal from XRG and ADNOC, then the Treasurer will claim the sale was a terrible one for controlling our supply of gas.

The FIRB considerations on this deal constitute a really big deal and could drive Santos shareholders nuts waiting for the final decision.