Santos CEO warns gas tax damaged Australia's reputation

The CEO of Santos (ASX:STO), Kevin Gallagher, issued a stern warning, asserting that Australia’s standing as a premier destination for energy investment has suffered "reputational damage".

Speaking at an industry event in Sydney, Gallagher highlighted the fallout from a contentious proposal to implement a 25% gas-export tax.

Although the federal Labor government has since distanced itself from the levy, the Santos chief argued that the mere prospect of such a fiscal shift has rattled the confidence of international trading partners and long-term investors who prioritise policy predictability.

Gallagher characterised the proposed tax as a product of "activism" rather than sound economic strategy.

While he expressed relief that "common sense has prevailed" with the government’s retreat, he cautioned that the cycle of repeated regulatory interventions has created a climate of anxiety.

According to Gallagher, global capital is highly mobile and naturally gravitates towards jurisdictions where it feels "welcome and safe".

He noted that Australia remains heavily reliant on foreign funding for large-scale oil and gas developments, and continued instability risks diverting these essential flows to more stable markets.

Beyond domestic policy, Gallagher addressed broader market trends, suggesting that investors are currently underpricing the geopolitical risks associated with the ongoing U.S.-Israeli conflict with Iran.

Contradicting optimistic forecasts of a swift resolution, he warned that the conflict could be protracted, leading to sustained commodity price volatility.

At the time of reporting, Santos’ share price was $7.96.