Saudi Aramco and Abu Dhabi National Oil Company (ADNOC) are examining the prospect of bidding for Australian gas producer Santos, reported Bloomberg, citing sources. 

Santos currently has an estimated value of around $17.49bn based on recent share prices. 

The Santos share price has been performing poorly, prompting unsuccessful takeover attempts and proposals for the company to separate its business units. 

Aramco and ADNOC, both state-owned entities, are conducting initial assessments of Santos as a potential acquisition, the source said.  

These oil and gas giants are investing heavily in natural gas, which is considered a vital transitional fuel, particularly in the Asian market.  

Last year, Aramco made a strategic move by purchasing a minority stake in MidOcean Energy for approximately $500m (SR1.88bn).  

MidOcean Energy, a subsidiary of EIG Global Energy Partners, holds interests in several liquefied natural gas (LNG) projects. 

Aramco also recently awarded contracts exceeding $25bn to bolster its gas expansion strategy, with a goal of achieving more than a 60% increase in gas production by 2030.  

According to sources, discussions are currently under way, and Aramco and ADNOC have not reached any definitive decisions regarding formal proposals.  

They also mentioned the possibility that Aramco could pursue a partnership to facilitate a potential bid. 

All companies involved, including Aramco, ADNOC and Santos, have not provided any official comments on the matter, the publication said.  

Santos has a history of rejecting takeover offers, including multiple bids from Harbour Energy in the US and preliminary discussions with Woodside Energy Group that did not progress earlier this year. 

Investors have been vocal about Santos separating its high-value LNG assets from its oil operations in Alaska and domestic gas business in Australia to realise higher valuations.  

Santos CEO Kevin Gallagher has faced investor pressure to improve stock performance and enhance shareholder returns following criticism over the company's extensive capital allocation for growth.