The national interest drum will beat louder after this morning's announcement that Santos has extended the period of due diligence for the Abu Dhabi-led syndicate to finalise the terms of a proposed takeover bid. 

Of greatest concern to the drum beaters is the need for a clearer definition of what constitutes national interest because it seems to have different interpretations in different energy sectors.  

Politics and environmentalism could explain why energy and technology metals, such as lithium and rare earths are being treated as critical to the Australian economy and worthy of generous government handouts, whereas oil and gas do not seem to be as highly valued. 

The difference between old and new energy has been at it most obvious over the past week as the Santos deadline loomed and resources minister Madeleine King thought it timely to authorise a $50 million investment of taxpayers money in a struggling WA lithium project. 

The Kathleen Valley mine of Liontown Resources is believed to be marginally profitable in the current depressed market for the battery metal which makes the government purchase of Liontown shares look more like a charitable donation than a wise investment. 

King and her environment-focused advisers would not agree with that view because they fully believe that oil and gas are yesterday's energy source and renewables - with their heavy use to lithium, rare earths and other metals - are the future. 

But it's the synchronised timing of the lithium investment and the Santos takeover which throws a spotlight on the questions of energy policy and national interest. 

Critics of the Abu Dhabi bid have become bolder as the deadline for exclusive negotiations was reached with Beach Energy, a small Santos rival, coming close to declaring an interest in a counter bid, or at least an offer for domestic gas assets should they become available. 

Comments last week from Beach boss Brett Woods raised the temperature of the proposed deal which now has an August 22 deadline and heaped pressure on the government as it mulls the meaning of national interest. 

Woods was reported to have said that the Abu Dhabi-led offer to acquire Santos was "not necessarily in the national interest" particularly because the Cooper Basin gas assets which are a major energy source for eastern Australia would become foreign owned. 

Those word will be hit a nerve at the highest level of the Australian Government and have resonated through regulatory agencies such as the Foreign Investment Review Board and the Australian Competition and Consumer Commission. 

Back in the 1980s Slugcatcher experienced first-hand how competition regulators work during the proposed sale of a loss-making newspaper, the Perth Daily News, to the already dominant publishing company in a tightly controlled market. 

At first glance, and because both the buyer and seller of the newspaper being traded, had reached a deal, the sale was expected to be waved through, largely because no-one else was expected to bid for a loss making publication. 

But that isn't what happened because a wild card bidder emerged with a low-ball offer that no-one had anticipated. 

That was all competition regulators needed to refuse the takeover and rule that if another offer was on the table from a bidder who would not worsen a near-monopoly situation, then the bidder must accept that or simply walk away – which is what happened and the paper being sold was closed rather than sold. 

In the Santos case there is not yet a rival bid on the table for any or all of the assets because of the exclusive negotiating mandate awarded to Abu-Dhabi and friends. 

That could change after the mandate expires and another interested party, perhaps Beach, says it is keen to buy the Australian domestic gas assets of Santos but not the LNG or international assets. 

But, before that point is reached, it is possible that government regulators have already asked Santos whether it is interested in offers for its Australian domestic assets from Australian investors. 

In other words, the situation seems poised for a re-run of the Daily News transaction with buyer and seller (Santos and Abu Dhabi) aligned though possibly not in a way that might satisfy government regulators. 

Spicing up the Santos situation is the national interest question and whether the Australian government sees the protection of existing domestic gas supply, and future possible expansion, as being important to the Australian economy. 

Beach, if asked, could tell the Foreign Investment Review Board (FIRB) that it is a true believer in protecting the national interest and, apart from minimal exposure to a small New Zealand assets it is totally focused on Australia. 

That is probably all that FIRB needs to hear, kicking into play a warning early last month from the Hong Kong sales desk of Macquarie Bank that the Abu Dhabi syndicate might opt to walk away rather than suffer the embarrassment of outright rejection, or an order from FIRB to sell Australian domestic gas assets to a potential buyer of those domestic gas assets.