CORPORATE GOVERNANCE STATEMENT CORPORATE GO VERNANCE The purpose of this Statement  is to provide details of the main corporate governance practices the Company had in place during the past financial year.  to agreements approved by shareholders at the 1989 Annual General Meeting and, as reported in the Company’s 2003 Annual Report, a review by the Remuneration Committee of the Board had determined that the provision of those benefits should cease on 30 June 2004 and benefits accrued to that date should be held by the Company and paid on retirement.  The Board works under a set of well-established corporate governance policies that reinforce the responsibilities of all Directors in accordance with the requirements of the Corporations Act and the Listing Rules of the Australian Stock Exchange (ASX). As a result of its decision to cease the provision of retirement benefits, the Board believes that from 30 June 2004, the Company’s policies and practices comply in all substantial respects with the ASX Best Practice Recommendations. To assist shareholders, the policies and practices described in this Corporate Governance Statement are cross referenced to a checklist of the ASX Best Practice Recommendations set out at the end of this Statement. The Board regularly reviews and updates its corporate governance policies on an annual basis and as required, to ensure that the Company’s policies remain in accordance with best practice. Following publication of the Principles of Good Corporate Governance and Best Practice Recommendations of the ASX Corporate Governance Council (“ASX Best Practice Recommendations”), Santos assessed its existing corporate governance practices for compliance with those Recommendations. As a result  of this assessment, which was initially carried out in 2003, the Board formed the view that the Company’s existing practices complied in substance with the ASX Best Practice Recommendations, except that at that time it provided retirement benefits to non-executive Directors. Historically, these benefits were provided pursuant The Board is responsible for the overall corporate governance of the Company, including its strategic direction and financial objectives, establishing goals for management and monitoring the attainment of these goals. Specifically, as detailed in this Statement, the Board is responsible for:  The Board delegates management of the Company’s resources to the Company’s executive management team, under the leadership of the Chief Executive Officer and Managing Director (“CEO”), to deliver the strategic direction and goals determined by the Board. This Statement details the responsibilities delegated by the Board to executive management for: To assist in the effective execution of its responsibilities, the Board Guidelines include procedures for providing Directors with all relevant information and familiarity with the Company’s major centres of operation. In addition, the Board has established a number of Board Committees including  a Nomination Committee, a Remuneration Committee, an Audit Committee, a Finance Committee and an Environmental and Safety Committee to assist with the effective discharge of its duties. All Committees are chaired by, and comprised only Except where otherwise indicated, references in this Statement to the “Board Guidelines” are to the formal guidelines in force during the past financial year and as at 30 March, 2005. ‘The Company continued its focus on stakeholder delivery throughout 2004, enhancing its commitment to top quartile corporate governance.’  Managing Counsel  and Company Secretary • the provision of strategic direction and oversight of management;  • corporate governance;  • the selection and evaluation of, and succession planning for, Directors and executive management;  • significant acquisitions and disposals of assets;  • significant expenditure decisions outside of the corporate budget;  • hedging of product sales, sales contracts and financing arrangements; • the remuneration of Directors and executive management;  • the approval of, and monitoring of financial performance against, corporate budgets; • the approval of delegations of authority to management;  • ethical standards and codes of conduct; and  • maintaining and reporting  on effective risk management (including safety and plant integrity); and • the integrity of risk management strategies and controls. • operating under approved budgets and written delegations of authority. • implementing corporate strategies;  Annual Report 2004 29 2.2 Board Procedures 2. BOARD OF DIRECTORS AND ITS COMMITTEES 2.1 Board Responsibilities 1. COMPLIANCE WITH THE ASX BEST PRACTICE RECOMMENDATIONS WESLEY GLANVILLE