Australia’s foreign investment regulator OKs Shell, PetroChina’s bid for Arrow Energy

Arrow Energy: Australia OKs Shell

SYDNEY — Australia’s foreign investment regulator has approved Royal Dutch Shell and PetroChina’s joint $3.2 billion takeover bid for Arrow Energy Ltd., the Australian coal seam gas producer said Friday.

Australia has been ramping up major natural gas projects as demand for a less polluting fuel than coal has skyrocketed from other countries, particularly China.

Arrow said the approval from the Foreign Investment Review Board means the company can now request regulatory approval from Chinese authorities. The Australian competition regulator gave its approval earlier this month to the Australian dollars 3.44 billion ($3.2 billion) takeover.

Under the deal, Arrow will spin off its assets outside Australia - including interests in China, India, Vietnam and Indonesia - into a new company, Dart Energy Ltd., in which existing Arrow shareholders will get a stake.

Arrow, which supplies coal seam gas to eastern Australia and Asia, said it will hold a vote on the deal at a shareholder meeting in mid-July.

Arrow claims to have the largest coal seam gas reserves in Queensland state.