Premier Mike Rann had previously said a decision on the cap – which was introduced in 1979 to protect Santos, then the state’s sole supplier of natural gas, from being taken over by Alan Bond – would be made by the end of September.

But Rann’s office has now said the issue remains unresolved and discussions with Santos are ongoing.

In May, the state government began reviewing the cap following a long campaign by Santos for its removal.

Ellice-Flint has argued that both Santos and the Australian energy market have changed greatly in the last two decades, and South Australia is no longer dependent on Cooper Basin gas reserves.

Analysts agree with Santos chief executive John Ellice-Flint that the shareholder cap is suppressing Santos’ share price.

At current prices, Santos has a market capitalisation of more than $8.5 billion. This could be expected to increase significantly of the cap was lifted.

But the increase would be due to a takeover premium and Rann has said he does not want to see Santos leaving the state.

Santos would be an attractive because of its extensive oil and gas reserves, particularly in Australia but also overseas, and its exposure to one existing and two proposed LNG projects (Darwin LNG, Gladstone LNG and the ExxonMobil-operated PNG Highlands LNG).

And if Santos were to be taken over, the largest company headquartered in South Australia would probably bid farewell to Adelaide.

The Rann Government is seeking offsets in terms of community contributions to balance a possible downturn in Santos's direct involvement with the state.

His wish list includes Santos maintaining sponsorship of the University of Adelaide’s Australian School of petroleum, the Adelaide Symphony Orchestra, Aboriginal art at the Art Galley of South Australia and other worthy causes. Rann is also believed to want Santos to commit to maintaining a corporate head office in the state – a difficult guarantee to offer on behalf of an as-yet unknown future owner.