Santos has signed an agreement to explore investment opportunities in oil and gas assets in Australia and Papua New Guinea (PNG) for existing shareholders ENN Group and Hony Capital.

China’s ENN and Hony currently have a total interest of 15.1% in Santos.

Under the terms of the agreement, the company will serve as the primary investment vehicle for material investment by ENN and Hony in upstream gas reserves and LNG production in the two countries.

The companies have also agreed to support future investment by Santos, which will make efforts to include them in investment opportunities.

Santos chairman Peter Coates said: “Santos welcomes the formalisation of a strategic relationship with Hony and ENN.

“Hony became a major shareholder in 2015 and together with ENN has continued to support Santos through challenging times.”

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“Santos welcomes the formalisation of a strategic relationship with Hony and ENN."

Under the terms of the agreement, the partnership will not exist if ENN and Hony cease to have a relevant interest in at least 15% of Santos shares.

ENN founder and chairman Wang said: "ENN and Hony strongly support the new growth strategy of Santos under the leadership of CEO Kevin Gallagher and the Santos board.

“The strategic relationship will effectively link up the upstream exploration and production (E&P) competence of Santos with China's fast-growing downstream market of natural gas, and explore many opportunities for Santos to realise its full potential as a leading producer of gas and LNG.”

ENN and Hony have also agreed to give due consideration and support to Santos with regard to future capital raising proposals.

Image: Cooper Basin in South Australia. Photo: © Santos.