The Santos Ltd (ASX: STO) share price is racing higher today.
Shares in the S&P/ASX 200 Index (ASX: XJO) energy stock closed yesterday trading for $7.68. In late morning trade on Thursday, shares are swapping hands for $8.16 apiece, up 6.2%.
For some context, the ASX 200 is up 1.08% at this same time, while shares in rival oil and gas giant Woodside Energy Group Ltd (ASX: WDS) are up 1.3%.
So, what's sending the Santos share price soaring?
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Santos share price takes off on Middle Eastern interest
ASX 200 investors are bidding up the Santos share price after Bloomberg reported that both Saudi Aramco and Abu Dhabi National Oil Co (Adnoc) are considering lobbing takeover bids.
Bloomberg noted that Middle Eastern energy companies were looking to increase their international gas exposure, citing people "with knowledge in the matter" who wished to remain anonymous.
The sources also revealed that "other potential buyers" could be interested in acquiring Santos.
As yet, there has been no comment from Santos, Adnoc or Saudi Aramco.
At the current Santos share price, the company has a market cap of just over $26 billion.
ASX 200 oil company's near merger with Woodside
The latest takeover rumours come just six months after Woodside's acquisition talks came to naught.
On 7 December, Santos responded to media rumours of the potential Woodside merger.
The company stated, "Santos confirms it has engaged in preliminary discussions with Woodside regarding a potential merger. Santos continuously reviews opportunities to create and deliver value for shareholders."
Between 7 December and 7 February, the Santos share price rallied 15%, with investors expecting Santos would be the bigger beneficiary of any merger.
But on 7 February, investors learned that the deal was off.
And Santos shares fell 11% over the following two weeks.
At the time, Woodside CEO Meg O'Neill said:
We continue to be disciplined in our approach to mergers and acquisitions and capital management to create and deliver value for shareholders. While the discussions with Santos did not result in a transaction, Woodside considers that the global LNG sector provides significant potential for value creation.
Santos CEO Kevin Gallagher added, "Following an initial exchange of information, sufficient combination benefits were not identified to support a merger that would be in the best interests of Santos shareholders."
Judging by today's rocketing Santos share price, investors believe a potential merger with one of the Middle Eastern energy giants could well be in the best interest of shareholders.
However, should any concrete deals materialise, I'll be keen to see what Australia's Foreign Investment Review Board (FIRB) makes of this.
