<%=Keywords%> PetroChina, Shell set sights on Arrow
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PetroChina, Shell set sights on Arrow
Oil giants PetroChina Co and Royal Dutch Shell have made a joint A$3.3 billion ($3 billion) bid to acquire Arrow Energy Ltd, an Australian coal-seam gas developer.
Analysts said the move would boost PetroChina's gas portfolio and also help speed up its initiatives for new energy.
Arrow Energy on Monday said in a statement that it has received a formal proposal from a company jointly owned by Royal Dutch Shell and PetroChina. Under the proposal submitted, Arrow shareholders would get $4.45 cash per share plus a stake in a new entity comprised of Arrow's international business.
Arrow claims to have the largest reserves of natural gas in Australia's northeastern state of Queensland.
"It is a good deal for the Australian company," said Han Xiaoping, chief information officer of domestic energy portal China5e.com. "Through the deal Arrow Energy can get an entry into the Chinese market, which is full of opportunities."
Coal-seam gas, which is commonly known as coal-bed methane, has similar components like natural gas. China plans to increase its annual coal-bed methane output to 10 billion cubic meters in 2010.
PetroChina is one of the main developers of coal-bed methane domestically. However, large-scale development of the gas is still hampered by issues like technological constraints, said Han.
"Through the acquisition of the Australian company, PetroChina can get access to advanced technologies, which would help in further energy development," said Han.
PetroChina could also utilize the technology for gas development in other countries, he said.
China has seen rapid growth in natural gas consumption in recent years. But, with domestic consumption unable to keep pace with output, the country has to import more gas from overseas.
Coal-bed methane is an effective measure for the country to reduce its reliance on imports, said Han.
Analysts said the partnership with Shell will reduce the risks involved in overseas acquisitions for the Chinese oil company.
The offer to acquire Arrow Energy is the latest step by PetroChina in its overseas expansion plans. The company's overseas development will focus on the Middle East, Africa, and South America this year, said Jiang Jiemin, president of PetroChina's parent China National Petroleum Corp (CNPC).
"Iraq will still be our focus for overseas development," Jiang told China Daily on Monday on the sidelines of the ongoing annual National People's Congress session.
The company is also looking for opportunities in Iran, said Jiang.
China's crude oil imports are likely to go up by 9.1 percent this year to 212 million tons, according to a report from CNPC.
The nation's oil dependency reached alarming levels last year with imports accounting for 52 percent of the total consumption, Customs figures showed. Imports of more than 50 percent are globally considered to indicate an energy security alert.
Analysts said China should further diversify its oil import sources for sustainable supplies. At present the Middle East, Africa and the Asia-Pacific are the three main regions that supply crude oil to the country.
 
(Source from China Daily)