Annual Report 200412
The Santos base business
comprises production from assets
in all of the Company's existing
producing fields. 
Santos is countering decline from
mature fields with strategies such
as optimisation and trialling new
technologies to maximise output,
while running an exploration
program which aims to add new
projects and production.
At all times, ensuring the safety
of all operations and minimising
any environmental impacts
remains paramount.
2004 PRODUCTION IMPACTED
BY MOOMBA INCIDENT
Santos' total production in 2004
fell from 54.2 million boe in 2003
to 47.1 million boe, primarily due
to the effects of the 1 January
incident at Moomba that resulted
in a reduction of 4.6 million 
boe, together with declining
performance from the East Spar
and Stag fields in the Carnarvon
Basin, offshore Western Australia.
Sales gas and ethane production
fell 14% during the year from
222.8 PJ to 190.5 PJ. Production
declined in the Cooper Basin and
gas production from the onshore
Otway Basin ceased with the
divestment of these interests.
However, gas production was
steady or increased in four of five
other areas of operation. This
illustrates the success of Santos'
continued efforts to diversify its
base business and to optimise
existing production. 
Lower Cooper Basin gas
production was partly offset 
by higher gas production from
eastern Queensland through
appraisal and development
success at Churchie, new interests
in Indonesia at Kakap and Brantas
and increased interests at
Patricia-Baleen. Amadeus Basin
gas production remained flat 
as declining production was
countered by successful
development drilling during 
the second half of 2004 at Palm
Valley and Mereenie.
Crude oil production was 13%
lower at 9.5 million barrels, down
from 10.9 million barrels in the
previous year as production
declined at Stag, Legendre and
Jabiru-Challis. Successful infill
drilling at Legendre and Stag
helped turn around declines for
these fields during the second
half of 2004. The program to
improve production at Stag will
continue into 2005 as simulation
studies suggest further drilling
and increased water injection
could improve future production. 
Cooper Basin oil production
declined just 4% during 2004 
due to successful delineation,
development and production
optimisation at several fields,
particularly Merrimelia, Derrilyn
and Mulberry. Amadeus Basin oil
production declines were made
less severe through successful
drilling at Mereenie.
Condensate production increased
by 20% from 3.1 million barrels
to 3.7 million barrels as Bayu-
Undan liquids production
commenced with better than
expected performance during
2004, offsetting the lower
condensate production from the
Cooper Basin due to the Moomba
incident and decline at East Spar
as the field approached the end
of its production life. 
Condensate production from the
United States was also improved
by almost 0.1 million barrels 
as successful development and
delineation wells on the deep 
Frio trend contributed with
improved condensate content
during the year.
LPG production declined by 
34% to 158,600 tonnes in 2004
from 240,700 tonnes in 2003,
due mainly to the effects 
of the Moomba incident on the
production of liquids through the
liquids recovery plant. Production
from Bayu-Undan was able to
only partially offset this decrease.
APPLYING NEW TECHNOLOGIES 
Reservoir studies have identified
that some lower permeability
reservoirs may have significant
potential to increase recoveries
through activities such as
additional infill drilling, fracture
stimulation and waterflooding. 
Santos tested new technologies 
in the Cooper Basin in drilling,
completions and artificial lift
optimisation during 2004 to
improve product delivery and
recovery in order to reduce
production costs per unit.
To this end, further reductions 
in costs for 2005 are targeted 
by increasing the focus on 
fit for purpose rigs and larger
campaigns. These efforts will be
supported by a significant boost