The most intriguing aspect of the joint Royal Dutch Shell and PetroChina offer for Arrow Energy, a holder of Australian coal-seam gas reserves, is not the price (a discount to recent deals in the sector) or the timing (as Arrow is struggling to fund expansion on its own). It is the fact it is being made at all.

International oil companies routinely team up with state-owned national oil companies to bid for undeveloped assets. But very rarely do IOCs partner with NOCs to buy fully formed public companies; Shell executives cannot remember ever having done so.

This says a lot about the untested science of harvesting coal seam gas to convert into liquefied natural gas. When local producer Santos selected state-owned Petronas as its 40 per cent partner in an LNG project two years ago, it was with the aim of securing at least one long-term supply contract. Similarly, by partnering with PetroChina, Shell can nail down a customer nation determined to wean itself off coal.