Canada blocks Malaysian energy takeover deal

Written By Unknown on Sabtu, 20 Oktober 2012 | 22.39

The federal government has blocked a $5.2-billion bid by Malaysia's state-owned oil company Petronas to take over Calgary-based Progress Energy Resources Corp.

In a statement issued late Friday, Industry Minister Christian Paradis said the proposed takeover did not meet Canada's "net benefit test."

"I can confirm that I have sent a notice letter to Petronas indicating that I am not satisfied that the proposed investment is likely to be of net benefit to Canada," Paradis said in the statement.

"Due to the strict confidentiality provisions of the [Investment Canada] Act, I cannot comment further on this investment at this time," he said. Petronas now has 30 days to "make any additional representations and submit any further undertakings," the minister said.

"Subsequently, I will either confirm this initial decision or approve the acquisition."

Paradis added his government has a "long-standing reputation for welcoming foreign investment" and "remains committed to maintaining an open climate for investment."

The decision comes as the Conservative government is reviewing China National Offshore Oil Corp.'s proposed $15.1-billion takeover of Calgary-based Nexen Inc. under the act.

On Oct. 11, Paradis extended the government's review of CNOOC's bid by 30 days and said the review period may be extended again.

Petronas and Progress Energy are already partners in an ambitious project to export liquefied natural gas (LNG) by ship from British Columbia.

The proposal now on hold would give Petronas control over Progress Energy's Montney gas shale assets in the foothills of northeast British Columbia, reserves that could feed a planned LNG facility in Prince Rupert, B.C.


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