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Shell, PetroChina Still Await Approval for Arrow Deal

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By Ben Sharples

April 6 (Bloomberg) — Royal Dutch Shell Plc said the company’s joint A$3.5 billion ($3.2 billion) bid with PetroChina Co. to acquire Arrow Energy Ltd. is yet to be approved by the Australian government, denying a press report.

“We continue to work through the government approval process,” Phil Connole, Melbourne-based spokesman for Shell, said by telephone today. The Australian Financial Review reported earlier that backing from the nation’s Foreign Investment Review Board for the transaction had been secured.

Australian lawmakers have increased scrutiny of resources takeovers by China, citing concerns the country may lose control of strategic assets. Chinese companies spent a record $32 billion last year buying oil fields and coal and metal mines to supply the world’s fastest-growing major economy.

Shell and PetroChina agreed to acquire Brisbane-based Arrow as part of a joint venture after raising their offer to A$4.70 a share in cash, from A$4.45, Shell’s Australian unit said March 22. Arrow investors will also receive shares in a new company called Dart Energy Ltd. holding the explorer’s gas assets overseas and Arrow’s stakes in Australian-listed companies.

Australia will remain open to foreign investment in its resources industry when it is in the nation’s interests, Energy Minister Martin Ferguson said in January after Yanzhou Coal Mining Co.’s A$3.5 billion acquisition of Felix Resources Ltd.

Shell and PetroChina filed their application last week. The investment review board is unlikely to have significant concerns about the Arrow deal, Benjamin Wilson, an analyst at JPMorgan Chase & Co. in Sydney, said in a March 22 report.

–Editors: John Viljoen, Amit Prakash.

To contact the reporter on this story: Ben Sharples in Melbourne at [email protected]

To contact the editor responsible for this story: Jane Lee in Kuala Lumpur at [email protected]

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