As so often seems to be the case in the APAC energy industry landscape, one story has dominated the news agenda this week – the proposed takeover of Santos by XRG, the Abu Dhabi based consortium.

With the offer having been made and accepted to buy the Adelaide-based gas company for north of $30 billion dollars, now the real work starts for the various regulators and governments to see whether they think the deal is a good one.

And in that sentence lies something central to the petroleum sector – does this takeover represent a good deal for Australians, South Australians and even the people of Adelaide too?

The language being used here demonstrates the central place the oil and gas industry plays in the lives of Australians. As treasurer Jim Chalmers said this week the national economic interest is the "primary lens" in his first major decision.

This isn't a deal to protect the country's food supplies, or an arrangement for one of the world's super-powers to offer us protection from some foreign invasion. This is the proposed takeover of a firm which having started business in 1954 has done very well for itself, thank you very much.

But as the Foreign Investment Review Board (FIRB), Australian Securities and Investments Commission (ASIC), the National Offshore Petroleum Titles Administrator (NOPTA) as well as competition watchdogs in the US and Papua New Guinea all try and weigh up that question and others, the national interest question is the one they'll be trying to answer.

Will those scrutinising the deal accept that XRG will play fair and not in years to come put the squeeze on the pace of Australian development by holding back supplies with the aim of affecting energy prices?

Could XRG's deep pockets enable the opening up of gas reserves such as the Narrabri or even improve sequestration rates at facilities like the Moomba CCS project?

And from a more politically nuanced position, could Chalmer's ultimate approval of any such deal actually leave him and the government exposed to criticism if XRG did play hardball?

As the negotiations and examinations progress, it is of course possible that the shape of the deal will change in the months to come.

If FIRB voices concerns to XRG about the lack of any Australian influence at the consortium's top table, that could possibly open the door to invite in an Australian player to make the whole thing more palatable for Canberra.

And of course, when we're talking about the national interest consideration, it's actually an international consideration.

As if to demonstrate that comes news today that the boss of Kumul Petroleum, Papua New Guinea's national petroleum company, has called for XRG to commit to developing the $28bn Papua LNG project as part of the takeover of Santos.

Kumul is a big stakeholder in this complex affair as Santos owns nearly 23% of the Papua LNG project which is also backed by the PNG government.

This one is sure to run and run.

Yours, 

Russell Yeo