PetroChina, Shell union 'mutually beneficial'

A joint venture by oil industry giants PetroChina and Royal Dutch Shell in the oil- and natural-gas rich Ordos Basin is estimated to be worth close to $1.3 billion (£829 million).

The project also has the potential to transform the outlook of both organisations as they benefit from the union, according to Bloomberg.

For Shell, the pairing could help it piggyback on the rising status of China and Asia on the world stage, opening up to opportunities in global resources from the Middle East to Australia.

"This is the most advanced Chinese alliance; this is about the future," Jerry Kepes, a partner at the Washington energy consultant PFC Energy, told the news source. "Shell gets it. But Shell has to deliver."

PetroChina will meanwhile gain all of Shell's expertise, but some commentators have warned that after absorbing their knowledge, the former could become a competitor.

However, the Australian Foreign Investment Review Board has delayed the decision over whether the takeover of gas explorer Bow Energy by PetroChina and Shell will be approved by 90 days.

Posted by Lauren Steadman