It's turning out to be another solid day for the S&P/ASX 200 Index (ASX: XJO) and most ASX 200 shares so far this Tuesday. At the time of writing, the index has risen by a strong 0.53%, pushing it back over 7,800 points. But that's quite different to what is happening to the Santos Ltd (ASX: STO) share price.
Santos shares are missing out on today's market optimism, and decisively so. At present, the ASX 200 energy stock is down a hefty 1.66% to $7.72 a share after closing at $7.85 yesterday afternoon.
This seems to be a Santos problem, as most other ASX 200 oil and gas stocks, including Woodside Energy Group Ltd (ASX: WDS), Karoon Energy Ltd (ASX: KAR) and Beach Energy Ltd (ASX: BPT), are currently well in the green.
So what's up with the Santos share price today?
Why is the Santos share price dropping so heavily on Tuesday?
Well, there's been no fresh ASX news or announcements out of Santos itself today. However, there has been some news regarding Santos that could be weighing on investors.
One of Santos' major projects is the Papua LNG joint venture, located in Papua New Guinea. Santos has a 22.8% interest in this joint venture, with the other partners being international energy heavyweights TotalEnergies and ExxonMobil.
Santos told investors last month that engineering and design work has commenced at Papua LNG. However, yesterday saw Total Energies release a statement regarding the project. This statement told investors that Patrick Pouyanné, Chairman and CEO of TotalEnergies, held a meeting with the PNG Prime Minster James Marape over the project's future.
It didn't exactly paint a flattering picture of the project's commercial viability. Here's what some of the statement said:
[Pouyanné] also informed the Prime Minister that, after receiving first EPC [engineering, procurement and construction] offers, it appears that the project will need to keep working with contractors to obtain commercially viable EPC contracts and requires more work to reach FID [a final investment decision].
In that view, the project will review the structure of some packages and open the competition to an enlarged panel of Asian contractors. As a consequence, FID of Papua LNG project is now expected in 2025.
So this could be what is weighing on investor sentiment regarding the Santos share price today. It's certainly not the news Santos investors were probably hoping to hear this April.
Regardless, the Santos share price remains up 0.6% in 2024, and up 7% over the past 12 months. At the current pricing, this ASX 200 energy stock has a price-to-earnings (P/E) ratio of 11.77, and a dividend yield of 3.65%.
