UPDATE 1-Activist investor Snowcap asks Australia's Santos to reduce upstream investments

(Updates with details on the letter, background)

March 9 (Reuters) - Australian gas producer Santos Ltd received a letter from shareholder and activist investor Snowcap Research on Thursday, urging the company's board to reduce upstream investments and focus on increasing shareholder returns.

In the letter to the Santos board, Snowcap called for an overhaul of the gas producer's "misguided and reckless" growth strategy and advocated for reforms that it claimed could increase value for shareholders by as much as 50%.

Santos has committed to $7 billion of new growth projects since 2021 and has another $6 billion of potential spending targeted for final investment decisions, which represents "by far the most aggressive upstream capex plan" in the sector, the letter stated.

Snowcap is calling for reforms, including restoration of "capital discipline", lowering upstream capex, increasing capital returns to shareholders, enhancing environmental and safety perormance, realigning incentives and updating its governance.

Santos did not immediately respond to a Reuters request for comment.

(Reporting by Riya Sharma in Bengaluru; Editing by Rashmi Aich)