Santos has long complained that the cap limits share price growth and company growth.

The outcome of the review, which was requested by Santos, is expected by the end of September, the Adelaide-based company said this morning.

SA Premier Mike Rann said the review was requested by Santos, and any lifting of the cap was not a done deal.

"My only concern is what's in the best interests of South Australia," Rann said.

However, Rann acknowledged that for many years, critics of the cap had said it was anti-competitive, deflated Santos' share price, and was a restriction that didn't apply to any other South Australian company.

"A lot has changed in the past six to seven years and I agree with Santos that it's time to look at it again," Rann said.

Introduced in 1979, the shareholding cap was originally intended to stop controversial businessman Alan Bond from taking over the company amid concerns over gas supply security in the state.

"We will be submitting to the review that the shareholding cap is no longer relevant, given the changes in the South Australian energy markets since its introduction over 28 years ago," Santos managing director John Ellice-Flint said.

"During that time Santos has also changed considerably, developing a diverse asset base with oil, gas and LNG production throughout Australia and internationally.

"We have also continued to demonstrate our strong commitment to the state through significant investments in our new corporate headquarters in Adelaide, and in the ongoing development of the Cooper Basin."

Chairman Stephen Gerlach told the company's AGM this morning that removing the cap would place Santos on an "equal footing" with its peer companies.

"This cap has been a negative for our growth aspirations and also for sharemarket perceptions of the company," he said.

"If we are to be a truly international exploration and production companies, we need to operate on a similar footing to similar companies domiciled elsewhere."

Some analysts have speculated that removal of the 15% cap would enable a demerger of Santos into two sister companies: a domestically focused company producing oil, conventional gas and coal seam methane from South Australian and eastern states blocks; and a high-risk, high-reward corporation focused on producing LNG, oil and gas from northern Australian and overseas acreage.

Also at the AGM, Gerlach said 2006 was a year of mixed fortunes for Santos.

He said that while the company achieved record production and sales revenue, its year-on-year shareprice fell for the first time in five years.

Gerlach attributed the result to a lower oil price, as well as operational problems in Indonesia, namely the reserves downgrade at Jeruk and the East Java mud flow disaster.