Canadian government blocks Petronas $5.12-bn bid for Progress Energy

The Canadian government yesterday blocked Malaysian state oil company Petronas' $5.12-billion takeover bid for Progress Energy Resources Corp, a move that could also indicate where the proposed $15.1-billion bid for Canada's oil producer Nexen Inc by China's Cnooc is headed.

''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,'' said industry minister, Christian Paradis in a statement.

"Due to the strict confidentiality provisions of the Investment Canada Act, I cannot comment further on this investment at this time," Paradis added.

Early this month, the Canadian government had extended its review of Petronas bid for the Canadian gas producer by two weeks as the country decides on how to deal with the recent surge of acquisitions of Canadian resource companies by overseas firms.

Petronas now has 30 days to appeal or give more sops so that the government could make a final decision.

In late June, Petronas' Canadian subsidiary, Petronas Carigali Canada Ltd, had offered to buy Progress for C$20.45 per share, or $4.7 billion– and about $5.4 billion, including debt. (See: Malaysia's Petronas to buy Canada's Progress Energy for $5.4bn)