Santos has announced a significant budget increase for its Barossa gas project. 

The project, situated in the Timor Sea, is now expected to cost between US$4.5 billion and US$4.6 billion, marking an increase of up to US$300 million (AU$456.1 million). 

This update comes in the wake of regulatory delays and legal challenges, which have also pushed back the project's start-up date to the third quarter of 2025.

Analysts had braced for a larger cost blowout, with estimates ranging up to $800 million, but the actual figures released by Santos have been relatively lower. 

Analysts attribute the overrun largely to Santos' struggles with regulatory compliance as a key factor in the increased capital expenditure.

The project's journey has not been smooth, including a recent Federal Court legal challenge against the construction of the project's pipeline. 

Additionally, Santos was required to redo consultations with affected communities following a 2022 court ruling.

On the operational front, the project, integral to supplying gas for the Darwin LNG export project, has fully commenced with pipe laying and drilling activities. 

This progress comes alongside a financial report from Santos showing a 3 per cent increase in sales for the December quarter, although the full-year figures fell by 24 per cent.

In parallel developments, Beach Energy, a Santos partner in the Cooper Basin production assets, announced a significant write-down of about $721 million before tax. 

This adjustment reflects increased capital and operating costs, particularly in the Cooper Basin fields.