Chinese state owned petroleum major PetroChina has teamed up with Royal Dutch Shell in a bid for Arrow Energy Ltd, an emerging Australian leader in coal seam gas (CSG) development.
The initial bid of A$3.3 billion ($3 billion) valued Arrow's shares at $4.45, a 28 per cent premium on last week's close of $3.48.
The Anglo Dutch major already owns a 30-per cent stake in Arrow's domestic assets, acquired two years ago.
Shell and PetroChina recently agreed to work together to develop shale gas projects in China.
According to analysts, the joint bid for Arrow makes sense as last June the Australia had spurned a single handed attempt by Chinese aluminium major Chinalco to acquire a stake in Rio Tinto for nearly $19.5 billion (See: Rio terminates Chinalco deal; to raise $15.2 billion through rights issue).
The two oil giants will have the capital resources that Arrow will need to develop its coal-gas reserves, analysts said.