Speculation is building that Australian oil and gas producer Santos may be again in talks with one or more potential suitors looking to acquire the company, as unconfirmed reports emerged that two Middle Eastern energy giants are evaluating potential bids.

Santos, one of the largest Australian gas companies, declined to confirm or deny reports from Bloomberg suggesting that Saudi Aramco and Abu Dhabi National Oil Company (ADNOC) had been conducting preliminary evaluations of the company.

However, the reports pushed Adelaide-based Santos’ share price almost 5 per cent higher on Thursday,

MST Marquee energy analyst Saul Kavonic said Santos had been “shopping itself for a while” and suggested a number of possible bidders may have conducted early evaluations, attracted primarily to the company’s prized liquefied natural gas (LNG) interests in Papua New Guinea.

“Aramco and ADNOC are kicking tyres on lots of LNG opportunities,” he said.

“Lots of potential acquirers start to consider Santos, but once they look under the surface at Santos they see too many problems at the legacy onshore Australian assets and walk away.”

While Kavonic added that it would be a “real stretch” to think either of the Middle Eastern heavyweights named in the report would actually lob a bid for Santos, he suggested the leak could be a sign of more advanced discussions on foot between Santos and another third-party bidder.

The Middle Eastern names may have been leaked to add tension to those talks, he said.

“Other possible bidders include European majors, MidOcean, ConocoPhillips, but all face value, funding and alternative priority hurdles,” he said.