Petronas, Progress Start Talks with Ottawa on Acquisition Resubmission

Executives from state-owned Petronas Carigali Canada (Petronas Canada) and Progress Energy Resources Corp. have met with Canadian officials regarding Petronas' $5.2 billion (CAD 5.18 billion) agreement to acquire Progress Energy, Petronas disclosed Tuesday in a published statement. 

"Petronas Canada intends to make further submissions to the Minister in order to obtain approval of the proposed transaction," the company wrote in its statement. 

Petronas' affirmation of its commitment in pushing ahead with the deal follows closely from Ottawa's decision announced Oct. 19 to reject Petronas' acquisition bid. Industry Minister Christian Paradis said in a published statement he was "not satisfied that the proposed investment is likely to be of net benefit to Canada." 

After rejecting the Petronas bid, Ottawa gave the company another 30 days to resubmit its offer. 

Industry watchers are firmly of the opinion that Petronas will stay focused on closing the deal as the state-owned enterprise faces a growing need to meet a natural gas shortfall in Malaysia. An analyst with HwangDBS Investment Bank Berhad told Rigzone Oct. 22 that Petronas appears "very keen on the acquisition." 

As part of its deal with Progress, Petronas established a joint venture last year between the two companies to develop a portion of Progress' Montney shale assets in the foothills of northeast British Columbia and to explore additional opportunities to develop liquefied natural gas (LNG) export capacity on British Columbia's west coast.