Thursday, 13 December 2012

Petronas completes US$5.3bil takeover of Canada's Progress

CALGARY, Alberta: Malaysia's Petronas completed its C$5.2 billion ($5.3 billion) takeover of Progress Energy Resources Corp on Wednesday, a deal that was expected to have sailed through Canada's approval process but got ensnared in a heated national debate about foreign control of energy assets.

The government of Prime Minister Stephen Harper approved the transaction on Friday, along with the $15.1 billion acquisition of Nexen Inc by China's state-owned CNOOC Ltd , following months of deliberation.

Industry Minister Christian Paradis initially rejected the takeover of Progress, a mid-size natural gas producer, in October, saying it would not have been a net benefit to Canada, but invited the Malaysian state oil company to resubmit its application.

On Friday, the Harper government also issued new guidelines for takeovers of Canadian energy businesses by foreign state-owned enterprises, restricting future bids for control over oil sands assets and suggesting the other energy deals will also be difficult.

Petronas and Progress have announced plans to build a liquefied natural gas export plant on Canada's West Coast that could cost up to C$11 billion.

Progress's chief executive said last week that a completed takeover could lead to a larger project because Petronas would have access to all of Progress's gas reserves, not just the ones that were part of the companies' previous joint venture.

Shares of Progress were up 1 Canadian cents at C$21.98 on the Toronto Stock Exchange, a penny below Petronas's bid price. - Reuters