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Petronas, a Malaysian state-owned business, has revised its offer for Calgary-based Progress Energy Resources in hopes that Ottawa will sign off on the deal this time.
The deadline for approval has been extended to Dec. 30, the second extension since Industry Minister Christian Paradis rejected the initial $6 billion takeover proposal on Oct. 19. At the time, Paradis said he was “not satisfied that the proposed investment is likely to be of net benefit to Canada.”
No details have been released on how the latest bid for Progress, which has extensive shale gas holdings, differs from the earlier proposal.
The federal government is still pondering how it should handle the politically thorny issue of state-owned businesses from countries such as Malaysia, and more notably China, seeking to buy Canadian companies.
Ottawa is also weighing a proposed $15.1 billion takeover of Calgary-based Nexen Inc. by China National Offshore Oil Co. (CNOOC), China’s biggest offshore oil and gas producer. The deadline for approval is Dec. 10.
Warren Mabee, director of the Institute for Energy and Environment Policy at Queen’s University, believes the federal government is caught between competing interests.
The Conservatives strongly believe in free enterprise and foreign investment, but they don’t like state-owned businesses, especially as their core constituents start to express more discomfort with these deals, he said.
“They are holding back from pulling the trigger,” Mabee said. “If this were an election year, I think they would have said ‘No’ to shore up support.”
Citing sources, Bloomberg News reported Tuesday that CNOOC has accepted management and employment conditions, set by the Canadian government, that at least 50 per cent of Nexen’s board and management positions be held by Canadians.
Commercial issues, such as the extent of capital spending requirements and other matters related to CNOOC’s status as a state-owned enterprise, are still being negotiated, Bloomberg News said.
When asked during Question Period what the government’s conditions are on the CNOOC sale, Prime Minister Stephen Harper did not respond. “The government’s policy on these matters, while we welcome foreign investment, is to scrutinize every individual foreign investment to make sure they are in the best interests of this country,” Harper said.
For the rest of this article, please go to the Toronto Star website: http://www.thestar.com/business/article/1290614–petronas-revises-bid-for-progress-energy-resources