ROYAL Dutch Shell is on the brink of gaining a lucrative foothold in the energy supply chain to China after a £2.1bn bid for Australia’s Arrow Energy was accepted.
Shell’s joint bid with PetroChina is now awaiting the green light from Australian regulators after it was unanimously recommended to Arrow shareholders.
The firms do not expect to face major problems and final confirmation of the deal is imminent. However, Shell will be mindful of the Australian government blocking its takeover of Woodside Petroleum a decade ago.
Shell already owned 30 per cent of Arrow’s assets after snapping them up in a deal two years ago. The takeover gives Shell and PetroChina control of 37 per cent of Australia’s coal seam gas reserves.
The prospects will provide a valuable route to supplying energy to the rapidly expanding Chinese and East Asian economies.
Shell executive director Malcolm Brinded said: “The new joint venture will be an important growth asset and help meet growing demand for cleaner energy in Australia and international markets.”
Arrow has risen from a promising firm to one of Australia’s best-positioned gas providers. Its assets include the country’s biggest holding of methane gas and more than 65,000 sq km of coal deposits in Queensland.