Higher bid seals Arrow deal
By Pan Xiaoyi |
March 23, 2010, Tuesday
|
Print Edition
Print Edition
PETROCHINA Co and Royal Dutch Shell Plc have agreed to buy Australia's Arrow Energy after raising their offer by 6 percent to A$3.4 billion (US$3.1 billion).
The deal is the first major investment by a Chinese company to tap Australia's booming coal-seam gas (CSG) resources - natural gas trapped in seams of coal. Arrow, a major owner of gas assets in Australia, claims to have the largest CSG reserves in Queensland.
Under the agreement, the 50-50 joint venture owned by Shell and a subsidiary of PetroChina will pay A$4.70 cash per share for Arrow's Australian business, the three firms said yesterday in separate statements. PetroChina and Shell raised the price from the initial offer of A$4.45 announced on March 8, and represented a premium of 35 percent to the pre-announcement close.
Investors will also get shares in a new company with Arrow's international gas assets in China, Indonesia, India and Vietnam, which may be worth as much as A$400 million, according to analysts.
The offer is subject to approval from Australian regulators and Arrow shareholders. A shareholder meeting is to be held in the middle of July to allow shareholders to vote on the offer. Arrow said its board was unanimously recommending that shareholders accept the offer.
On successful completion of the acquisition, the joint venture will own Arrow's CSG assets in Queensland and domestic power business as well as Shell's Queensland CSG assets and its site for a proposed liquefied natural gas plant on Curtis Island at Gladstone.
"PetroChina sees this joint venture as a significant commitment to building an integrated CSG and LNG business," said Ge Aiji, PetroChina's project manager.
The final investment decision on the large LNG project is expected to be made by 2012, according to a joint statement by PetroChina and Shell. The venture will be able to export 7 million to 8 million tons per annum of LNG from the proposed Curtis Island LNG plant, said Ge.
PetroChina, Asia's largest oil and gas producer, has teamed up with Arrow to explore for CSG in China's Xinjiang Uygur Autonomous Region to cut reliance on coal and crude oil. Last year, it signed US$41 billion deals with Exxon Mobil Corp to buy LNG from the yet-to-be developed Gorgon gas field off Australia's far northwest coast.
The deal is the first major investment by a Chinese company to tap Australia's booming coal-seam gas (CSG) resources - natural gas trapped in seams of coal. Arrow, a major owner of gas assets in Australia, claims to have the largest CSG reserves in Queensland.
Under the agreement, the 50-50 joint venture owned by Shell and a subsidiary of PetroChina will pay A$4.70 cash per share for Arrow's Australian business, the three firms said yesterday in separate statements. PetroChina and Shell raised the price from the initial offer of A$4.45 announced on March 8, and represented a premium of 35 percent to the pre-announcement close.
Investors will also get shares in a new company with Arrow's international gas assets in China, Indonesia, India and Vietnam, which may be worth as much as A$400 million, according to analysts.
The offer is subject to approval from Australian regulators and Arrow shareholders. A shareholder meeting is to be held in the middle of July to allow shareholders to vote on the offer. Arrow said its board was unanimously recommending that shareholders accept the offer.
On successful completion of the acquisition, the joint venture will own Arrow's CSG assets in Queensland and domestic power business as well as Shell's Queensland CSG assets and its site for a proposed liquefied natural gas plant on Curtis Island at Gladstone.
"PetroChina sees this joint venture as a significant commitment to building an integrated CSG and LNG business," said Ge Aiji, PetroChina's project manager.
The final investment decision on the large LNG project is expected to be made by 2012, according to a joint statement by PetroChina and Shell. The venture will be able to export 7 million to 8 million tons per annum of LNG from the proposed Curtis Island LNG plant, said Ge.
PetroChina, Asia's largest oil and gas producer, has teamed up with Arrow to explore for CSG in China's Xinjiang Uygur Autonomous Region to cut reliance on coal and crude oil. Last year, it signed US$41 billion deals with Exxon Mobil Corp to buy LNG from the yet-to-be developed Gorgon gas field off Australia's far northwest coast.
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