REUTERS

(Reuters) – When Nicholas Davies joined Brisbane-based Arrow Energy Ltd as chief executive in 2004, he was charged with growing the then junior explorer into one of Australia’s top coal seam gas producers by 2010.

Six years on, Arrow holds the largest coal seam gas acreage in Australia with plans to roll out the world’s first liquefied natural gas (LNG) plant using the unconventional gas resource, drawing energy giants Royal Dutch Shell and PetroChina to launch a friendly takeover offer.

Arrow agreed to an offer worth $3.1 billion on Monday, after Davies pressed the duo to improve their initial proposal by 6 percent.

“I can tell you, it was not an easy discussion,” Shell’s local chairman, Russell Caplan, told reporters.

Analysts who cover Arrow said the 51-year-old Davies was pivotal in the Shell-PetroChina negotiations and has played a leading hand in drawing Arrow out of the shadows to propel its market value some 80-fold since it listed a decade ago.

According to local media reports, the ex-BP executive owns 5.5 million shares in Arrow now worth $25.9 million based on the $4.70 a share cash offer.

In a sign of confidence in Davies, Shell/PetroChina said Arrow’s international assets, including exploration and coal-seam gas projects in China, Indonesia, Vietnam and India, would go into a new company, Dart Energy, under the existing board and management team.

Married with three children, Davies was the head of BP’s Asia Pacific gas and power business before he joined Arrow in 2004.

Davies, who holds an engineering and mathematics degree from the University of Nottingham in Britain, comes across as somewhat aloof and cautious, some analysts say, in contrast to the more charismatic, risk-taking leaders at Arrow’s larger rivals.

“He is very sharp and entrepreneurial. It’s obvious that his time at BP has made him very aware of global gas demand and the opportunities that are out there,” said John Young, an energy analyst at Wilson HTM.

Davies led Arrow to be the first firm to outline plans of converting cheap and abundant coal seam gas into the much higher-value LNG for export markets, a still untested technology.

The process involves extracting reserves of coal-bed methane from the coal seams through drilling, then piping the gas to the coast to be converted to LNG and shipped to users in Asia.

The other larger firms which have jumped onto the coal seam gas-to-LNG bandwagon include energy majors such as Britain’s BG Group, Malaysia’s Petronas and U.S. ConocoPhillips, which combined poured more than A$20 billion in acquisitions and projects in the burgeoning sector in 2008.

Arrow vaulted to prominence in 2008 after agreeing to sell 30 percent of its domestic assets and 10 percent of its international business to Shell for A$776 million.

The company’s staff describe Davies as a hands-on manager, who is focused and determined,

“When he first joined Arrow, there were only six people in the firm. So at times, he has had to wear the cap of a geologist or accountant,” said a staff member who declined to be identified.

“But he has a very hands-on approach in running the business and he easily takes on multiple roles.”

Davies’ ambition is not just confined to Australia.

He has also embarked on an aggressive campaign to grow Arrow’s overseas business, striking partnerships with India’s GAIL and Tata Power, PetroChina, PetroVietnam and Indonesia’s Pertamina to explore coal seam gas in those countries.

Arrow was planning to approve its Fisherman’s Landing LNG project, expected to cost about A$2.2 billion, in the middle of this year and start production in 2012 with an output of 1.5 million tonnes per year, before Shell and PetroChina made their offer.

The deal with PetroChina and Shell could ironically be the end of Fisherman’s Landing as Shell said it will use Arrow’s gas to supply its own, much bigger, Curtis Island LNG plant.

(Editing by Valerie Lee)

REUTERS ARTICLE

Associated Press, 03.21.10, 08:30 PM EDT

SYDNEY — Arrow Energy Ltd., a major owner of gas assets in Australia, has agreed to a sweetened takeover bid from Royal Dutch Shell and PetroChina Co. worth Australian dollars 3.44 billion ($3.15).

The deal comes as Australia ramps up major natural gas projects in response to booming demand from China and elsewhere as a less polluting fuel than coal to drive power generators.

Arrow said Monday in a statement to the stock exchange it received an offer from a joint venture company owned by Shell and PetroChina ( PTR – news – people ) named CS CSG Pty. Ltd. for AU$4.70 cash per share. Two weeks ago, the joint venture launched its takeover bid with a cash-per-share offer of AU$4.45.

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 said its board was unanimously recommending that shareholders accept the offer.

Arrow Energy is an integrated energy company focused on 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 ( ARRO – news – people ) arm, retaining 70 percent, with the remainder already held by Royal Dutch Shell ( RDSA – news – people ).

Among major integrated oil companies, Shell considers itself expert in converting methane to liquefied 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 that would benefit from the extra supply from Arrow.

PetroChina Co. is Asia’s largest oil and gas company. Last year it signed agreements with Exxon Mobil Corp. ( XOM – news – people ) worth $41 billion to buy LNG from the yet-to-be developed Gorgon gas field off Australia’s far northwest coast.

Copyright 2009 Associated Press. All rights reserved.

SOURCE ARTICLE

March 22 (Bloomberg) — Royal Dutch Shell Plc and PetroChina Co. agreed to buy Arrow Energy Ltd. after increasing their offer to A$3.5 billion ($3.2 billion), marking China’s entry to Australia’s coal-seam gas industry.

Iranians train Taliban to use roadside bombs

Miles Amoore Kabul

TALIBAN commanders have revealed that hundreds of insurgents have been trained in Iran to kill Nato forces in Afghanistan.

The commanders said they had learnt to mount complex ambushes and lay improvised explosive devices (IEDs), which have been responsible for most of the deaths of British troops in Helmand province.

The accounts of two commanders, in interviews with The Sunday Times, are the first descriptions of training of the Taliban in Iran.

According to the commanders, Iranian officials paid them to attend three-month courses during the winter.

They were smuggled across the border to the city of Zahidan, in southeast Iran, an hour’s drive from training camps in the desert.

Instructors in plain clothes provided daily exercises in live firing. The first month was devoted largely to teaching the Taliban how to attack convoys and how to escape before Nato forces could respond.

During their second month they were shown how to plant IEDs in sequence so that the rescuers of soldiers wounded in one blast would be caught in further explosions.

The third month was spent on storming bases and checkpoints. A hilltop fort was among the locations used for practice by a Taliban platoon.

Local mediators persuaded the commanders to travel to Kabul to tell their stories. They were interviewed on separate occasions on the edge of the city.

Western officials troubled by growing Iranian support for the Taliban describe the accounts as credible. A military crackdown in Pakistan is thought to have encouraged Taliban leaders to look to Iran for more help.

One of the commanders said: “The military is pressuring the Taliban in Pakistan. It is certainly harder to reach places that were once easy to get into. I think more of my fighters will travel to Iran for training this year.”

Karl Eikenberry, the American ambassador to Afghanistan, recently described signs of co-operation between Iran and the Taliban as disturbing.

“Iran or elements within Iran have provided training assistance and some weapons to the Taliban,” he said.

President Mahmoud Ahmadinejad of Iran has publicly backed his Afghan counterpart, Hamid Karzai. But American and British officials have accused Iran of playing a double game by giving covert backing to the Taliban.

Shi’ite Iran had long opposed the Sunni-dominated Taliban. The reason for the change was summarised by one Taliban commander who said of the Iranians: “Our religions and our histories are different but our target is the same. We both want to kill Americans.”

SUNDAY TIMES ARTICLE

March 20 (Bloomberg) — China may become of the world’s biggest natural gas markets by 2020 as the country seeks to reduce its carbon intensity by increasing the use of cleaner burning fuel, Royal Dutch Shell Plc Chief Executive Officer Peter Voser (above) said today at a forum in Beijing.

Shell is working together with PetroChina Co., the nation’s largest oil producer, to seek new energy sources in China, Voser said, according to a Web cast of the conference on the Web site of the official People’s Daily in the Chinese language.

To contact the reporter on this story: Ying Wang in Beijing at ywang30@bloomberg.net

Last Updated: March 20, 2010 04:10 EDT

BLOOMBERG ARTICLE

By Sheila McNulty in Houston

Published: March 19 2010 22:33

Royal Dutch Shell has announced a “significant new oil discovery” in the deepwater Gulf of Mexico that has the potential to be a hub.

The discovery, located in the Appomattox prospect in 2,200 metres of water, follows three notable discoveries by Shell in the Gulf last year.

Shell is operator of the prospect, holding an 80 per cent interest, with partner Nexen holding 20 per cent.

FULL FT ARTICLE

Carrie Tait, Financial Post Published: Friday, March 19, 2010

Courtesy of Royal Dutch Shell Royal Dutch Shell PLC, under pressure from a small group of shareholders, has responded to critics’ concerns with a report detailing its activity in Alberta’s oil sands.

Royal Dutch Shell PLC, under pressure from a small group of shareholders, has responded to critics’ concerns with a report detailing its activity in Alberta’s oil sands.

Shell said it published the 17-page report because it shares many of the same environmental and economic worries expressed by the shareholders who are demanding the oil and gas giant provide greater transparency with respect to its operations in northern Alberta.

“All aspects of oil price outlook, oil demand, regulatory framework, cost of CO2 and industry cost structure” are “taken into account when … investment decisions are considered,” Shell said in the easy-to-read document.

“When we assess the economic attractiveness of our major projects we include an expected future price for green house gas emissions (‘carbon price’) over the full life of the project,” Shell said. “Shell includes the expected carbon price in its economic assessments, which is higher than the current carbon price [of $15 per tonne for every tonne emitted above a certain reduction target] in Alberta, anticipating that potential future greenhouse gas regulation could lead to a higher carbon price.”

Shell expects to pay between US$2-million and US$3-million in Alberta for its carbon emissions in 2009, but did not provide further financial details regarding its carbon price predictions.

The company also talked about reclamation, the process of rebuilding the hills, forests, wetlands, and fens that are torn up as companies mine for bitumen. Shell takes a provision on its balance sheet for this process, booked as land is disturbed and reflecting the discounted value of the expected future costs.

Shell expects to spend between 3% and 5% of operating costs on reclamation, which it considers before starting a project, the report said.

Other financial, environmental, and social concerns were addressed in the online report. Shell’s oil sands operations churned out 78,000 barrels of oil per day in 2009 and it expects that to hit 150,000, or 4% of its total production, in the next few years. Mining is its primarily extraction method.

FairPensions, a British lobby group, rustled up enough shareholder support to get a resolution on the ballot at Shell’s upcoming annual meeting demanding more disclosure. It is almost certain that the resolution will fail.

But despite the resolution’s long odds, FairPensions attracted considerable media attention on both sides of the Atlantic, to the point where a British MP has tabled a resolution in the House of Commons asking the MPs’ pension fund to side with FairPensions.

Shell explicitly said its report is in response to the resolution.

“We’re quite cheered that Shell has taken a look at the resolution and decided it has some merit,” Duncan Exley, a spokesperson for FairPensions, said. “We need to look through [the report]…with our partners” before deciding whether it meets their disclosure demands.

BP PLC is facing the same shareholder resolution.

ctait@nationalpost.com

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LONDON, March 19 (Reuters) – Royal Dutch Shell (RDSa.L) and Canadian oil explorer Nexen Inc (NXY.TO) said they had made a “significant” discovery in the Gulf of Mexico, the latest in a string of big finds in the Gulf in the past year.

The companies said in statements on Friday that they had made the discovery at the Appomattox prospect in Mississippi Canyon blocks 391 and 392.

The companies added that the find lifted confidence in other unexplored sites in the area.

“The Appomattox discovery confirms our confidence in the play and provides a strong basis to evaluate the remainder of our significant acreage position in the Eastern Gulf of Mexico,” Nexen Chief Executive Marvin Romanow said.

Shell owns an 80 percent interest in Appomattox and Nexen owns 20 percent.

The Gulf of Mexico, one of the world’s most mature oil provinces, continues to be key to Western oil companies’s portfolios as new technology has opened ever deeper water to exploration.

(Reporting by Tom Bergin; editing by Simon Jessop)

REUTERS ARTICLE

THE WALL STREET JOURNAL

MARCH 18, 2010

By ROMY VARGHESE

Hartford Financial Services Group Inc. offered its first corporate bond deal since 2008 as part of its plan to repay federal bailout funds, joining Shell and other borrowers tapping investor demand for new debt Thursday.

Shell International Finance, the finance arm of Royal Dutch Shell PLC, was marketing $4.25 billion in high-grade bonds, tying for the sixth-largest deal so far this year, according to Dealogic.

—Prabha Natarajan contributed to this article.

Write to Romy Varghese at romy.varghese@dowjones.com

FULL ARTICLE