Energy giant Santos believes it can overcome community opposition to its controversial coal seam gas (CSG) projects, saying more development is needed, not less.

But the gas producer is in no doubt about the challenges ahead as some of its CSG exploration and development projects continue to raise the ire of environmental and landholder groups.

The Adelaide-based company’s chairman Ken Borda told shareholders that CSG was playing a growing role in the economy and more exploration and development of gas resources was needed, not less.

“If CSG is to play a role in supporting an internationally competitive manufacturing sector, its development must be progressed as a priority,” Mr Borda told the company’s annual general meeting in Adelaide on Friday.

However, he said the company needed to successfully engage with communities located near its operations.

“We believe that we can overcome these challenges and continue to be successful in both operating the assets we manage today, as well as in establishing new projects,” he said.

Mr Borda also opposed a resolution by 161 shareholders that Santos abandon its $1 billion investment in gas resources in and around Narrabri in New South Wales.

Shareholders overwhelmingly voted against the resolution, despite the Wilderness Society and other groups taking out newspaper advertisements urging them to “ditch the Narrabri project”.

In February the NSW Environment Protection Authority issued a $1500 fine to Santos after an aquifer was contaminated with uranium at the company’s Narrabri gas field operations in the Pilliga forest area.

Still, Mr Borda said over time, local communities would come to see that agriculture, communities and gas operations could co-exist successfully.

Chief executive David Knox said gas from coal seams was “unquestionably part of our way of life,” as 30 per cent of east coast gas supply is now met by CSG gas.

He said a benchmark water catchment study showed the effect of water the company extracts at the Narrabri project was very small.