Energy giant Santos has reported a fall in annual profit on lower oil and gas prices and lower production as the heat comes out of volatile global markets.

Santos announced on Wednesday a net profit of $US1.4 billion, down 33 per cent, as revenue fell by almost a quarter to $US5.9 billion.

“Demand for our products remains strong,” chief executive Kevin Gallagher said.

“Today’s results demonstrate the capability of Santos to generate strong cash flow, develop major projects and deliver sustainable shareholder returns,” he said.

Free cash flow was $US2.1 billion in 2023, down 42 per cent.

Santos said work on the Barossa gas project has been fast-tracked with first gas to be delivered in 2025 to provide a new source of gas to the Darwin gas facility.

The pipeline to deliver gas from the offshore field is 68 per cent complete and the second well is under way, the company said.

At full production, Barossa is expected to add 1.8 million tonnes per year to Santos’ expanding LNG portfolio.

“Our critical fuels are a necessary component in the energy security of Australia and Asia, and will be required to provide affordable and reliable energy,” Gallagher said.

The major emitter is relying on carbon, capture and storage (CCS) at its Moomba project in South Australia to offset greenhouse gases, with the project on track to generation carbon credits with the next 12 months.

Santos said the project will be able to store up to 1.7 million tonnes of carbon dioxide per year, making Moomba “very significant” for Australia-wide emissions reduction.

The company also released its sustainability and climate report that details progress towards its net zero emissions by 2040 target.

Santos declared a final dividend of US 17.5 cents, bringing the total shareholder return to US 26.2 cents for 2023.

– AAP