(Bloomberg) -- Saudi Aramco and Abu Dhabi National Oil Co. have been separately studying potential bids for Australia’s Santos Ltd., as the Middle Eastern energy giants seek to ramp up their gas investments overseas, people with knowledge of the matter said.

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State-owned Aramco and Adnoc have been conducting preliminary evaluations of Santos as a possible acquisition target, the people said, asking not to be identified because the information is private. Santos shares have gained about 1% in Sydney trading in the year through Wednesday, giving the company a market value of A$24.9 billion ($16.7 billion).

Santos has liquefied natural gas projects in Australia, Papua New Guinea and Timor-Leste that are prized for their proximity to fast-growing demand from Asia. It also has gas operations focused on the Australian domestic market as well as conventional oil assets in Alaska.

Shares in Santos rose as much as 5.2% to A$8.08 each, the highest intraday level since August.

Santos declined to comment. A representative for Adnoc declined to comment, while a spokesperson for Aramco didn’t immediately respond to a request for comment.

Gulf countries are investing billions of dollars in gas, which is seen as an important bridge fuel in the energy transition. Qatar plans to nearly double LNG export capacity, and Saudi Arabia and the United Arab Emirates are pumping cash into domestic fields and building trading operations globally.

Aramco in June reached an initial agreement to buy a stake in Sempra’s Texas LNG export plant in a deal that would include fuel shipments from the project. The Saudi firm made its first deal to purchase LNG from the US in the same month, signing a 20-year non-binding contract to take 1.2 million tons per year of LNG from NextDecade Corp.’s planned project in Texas.

Adnoc has been pursuing a string of acquisitions that have turned it into one of the energy industry’s most active dealmakers. It entered detailed negotiations last month over a potential €11.7 billion ($12.6 billion) takeover of German chemical producer Covestro AG. In May, Adnoc picked up stakes in gas projects in the US and Mozambique, and has ambitions to expand in chemicals and trading operations globally.

Adelaide-based Santos could also attract interest from other potential buyers, the people said. Deliberations are ongoing, and the suitors haven’t decided whether to proceed with any proposals, the people said.



Santos has received several takeover approaches in recent years. In 2018, Santos rejected multiple offers from US-based Harbour Energy Ltd.

Woodside Energy Group Ltd. had held preliminary talks on an acquisition of Santos last year in a deal that would have created an LNG giant. The discussions broke down early this year, and Santos said in February it would look for other ways to unlock shareholder value.

--With assistance from Michelle F. Davis and Matthew Martin.

(Updates with Santos share move in the fourth paragraph.)

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