Royal Dutch Shell, PetroChina offer $3 billion to takeover Australia’s Arrow Energy

Arrow Energy gets $3 billion takeover bid

SYDNEY, — Arrow Energy Ltd., a major owner of natural gas assets in northern Australia, said Monday that a company jointly owned by Royal Dutch Shell and PetroChina has sent it a takeover bid worth $3.3 billion Australian dollars ($3 billion).

Nearly half of Shell’s production of oil and equivalents comes from gas, so Arrow is a natural target for Europe’s largest oil company — and Shell already owns a 10 percent stake of Arrow’s operations outside Australia.

Shell confirmed it was considering acquiring the Australian company, and said talks were in an early stage.

Brisbane-based Arrow said in a statement to the stock exchange it had received a nonbinding indicative proposal of AU$4.45 ($4.06) per share plus a share in a new entity comprised of Arrow’s international business.

Arrow advised shareholders to take no action at the moment, and said the company had appointed financial and legal advisers to look at the proposal.

Shares in Arrow Energy surged more than 40 percent to AU$4.98 ($4.54).

Arrow Energy is an integrated energy company focused supplying coal seam gas to eastern Australia and Asia. It claims to have the largest coal seam gas reserves in Queensland state.

The company had been planning to list 20 percent of its Arrow International arm, retaining 70 percent, with the remainder already held by Royal Dutch Shell.

Among major integrated oil companies, Shell considers itself expert in converting methane to liquified natural gas, or LNG, so it can be shipped rather than piped away from its source.

It has a separate LNG project in the works in Queensland which would benefit from the extra supply from Arrow.