Shell, PetroChina bid $3 b for Arrow

Arrow, on Monday, said that the bid from a company jointly owned by Shell and PetroChina would give shareholders A$4.45 in cash per share, plus a share in a new entity comprising Arrow’s international business.  Shell confirmed it was in discussions to acquire Arrow’s domestic business, but declined to say more.

Early stage

PetroChina said the bid was at an early stage and there was no timetable. Coal-seam gas is natural gas trapped in seams of coal. Arrow has reserves of 6,150 petajoules of coal-seam gas, the largest in Australia.  The deal could come under scrutiny as Australia has had an uneasy relationship with Chinese investments after Rio Tinto scrapped a $19.5 billion deal with Chinalco last year and regulators said they preferred state-owned companies to keep their stakes in Australia’s top resource firms to no more than 15 per cent.

The relationship was further strained after China arrested four Rio Tinto staff last year on charges of bribery and stealing business secrets. This is not the first collaboration of PetroChina and Shell. The two started joint exploration of a shale-gas block in China last year. This would be PetroChina’s first stake in the coalbed methane sector in Australia, an industry that has attracted huge investments in recent years from firms like ConocoPhillips etc. Shell, which plans to build a liquefied natural gas (LNG) plant fed by Arrow’s coal-seam gas, already holds a 30 per cent stake in Arrow’s domestic coal-seam gas assets as well as a 10 per cent share in its international business.

DH Newsletter Privacy Policy Get the top news in your inbox
Comments (+)