The Santos Ltd (ASX: STO) share price appears to have succumbed to the weakness in oil prices overnight. It seems the uninspiring conclusion to the oil and gas company's week could not be snapped by its latest announcement involving the CSIRO.
The Santos share price finished the ASX session on Friday down slightly to $6.83. It is down 1.79% for the week.
However, the company's partnership with Australia's national science agency, the CSIRO will last long beyond this week. For that reason, it might be worth taking a look at what the partnership entails.
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Doubling down on carbon capture and storage
Despite copping some flak for an appearance at the COP26 climate summit, ASX-listed Santos is pushing forward with its carbon capture and storage ambitions.
Santos is one of Australia's largest oil and gas companies. Today it announced it has entered into a partnership with the CSIRO to develop what is hoped could become the lowest cost direct air capture technology in the world.
Essentially, Santos wants to help the science agency with its CSIRO Carbon Assist technology and put it to work. This technology is geared towards removing CO2 from the atmosphere and higher-concentration post-combustion scenarios. In other words, any circumstance where there might be high CO2 emissions.
Furthermore, upon development, Santos will look to commercialise their work at its Moomba site in South Australia. Subsequently, CO2 will then be transferred to the company's recently approved $220 million Moomba carbon capture and storage project.
Speaking on the topic of the CSIRO partnership, Santos CEO Kevin Gallagher said:
At Santos, we have an industry-leading target of achieving net-zero scope 1 and 2 emissions by 2040 and we are committed to looking at new technologies and finding cost-effective ways to reduce our emissions so that we can continue to supply affordable and cleaner energy to meet customer demand.
Following the go ahead for our Moomba CCS project this week, we're proud to partner with CSIRO to develop ground-breaking carbon capture technology which is really a negative-emissions technology.
The announcement noted that the partnership includes a framework for future commercialisation of the technology.
Despite taking another green step forward, the Santos share price had little of its own green today.
Looking at Santos on the ASX
On the ASX, Santos has benefitted from the surge in oil prices over the past 6 months. Its shares have gained almost 40% in value over the past year. For context, the S&P/ASX 200 Index (ASX: XJO) is up 20.5% in the past 12 months.
However, the company's bottom line is yet to recover to the same margins of 2019. Because of this, the price-to-earnings (P/E) ratio has expanded. Santos used to have a P/E of about 19x in 2019. Today, that figure is closer to 40.
Interestingly, a record quarter for sales revenue in the three months ending 30 September did not bring earnings back to normality.
The Santos share price has floated around without a clear direction since the quarterly release.
