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Shares of the S&P/ASX 200-listed company Santos rose significantly at 9.483 percent in Sydney trading after reports Royal Dutch Shell Plc may buy a stake in the venture.

Santos surged as much as 8.5 percent to A$13.84 in the ASX, the biggest gain since December 2008. In Sydney, it went up A$13.80 at 2:28 p.m. compared with a 0.7 percent increase in the benchmark S&P/ASX 200 Index.

Shell may spend A$2 billion to acquire as much as 35 percent of Santos's Gladstone liquefied natural gas project, the Australian Financial Review said.

Mark Greenwood, an analyst with Citigroup Inc., said in a client note today: "Shell probably have a better ability to deliver large- scale projects on budget and on schedule."

In a separate report, the Australian said the Hague-based Shell is competing with Korea Gas Corp. and China Petroleum & Chemical Corp., known as Sinopec, for a stake.

Prospects for the local mining companies reached new heights with the compromise reached with the Australian government last week.

The agreement on levies includes extending a 26-year-old petroleum resource rent tax to cover onshore oil and gas projects.