Malaysia's Petronas to appeal rejected Canada deal

Malaysian national oil company Petronas said it plans to appeal against Ottawa's rejection of its bid to buy Canadian gas producer Progress Energy Resources. Petronas said in a statement late Tuesday that it would meet officials from Progress Energy and the Canadian government "to better understand" Ottawa's requirements pertaining to the bid. "Petronas and Progress will work together to ensure that the (industry) minister has the necessary information to determine that the proposed acquisition of Progress would likely be of net benefit to Canada," it said. Canadian Industry Minister Christian Paradis said Friday that he was not satisfied with the bid to buy Progress for an estimated US$5.5 billion, a move that raised questions over Canada's openness to foreign investment. The two energy companies signed an acquisition deal in June, saying it was aimed at securing stable supplies of liquefied natural gas (LNG) from North America. But the transaction still required a green light from the Canadian government. Petronas has 30 days to make follow-up submissions for the industry minister to take into account on whether to approve the acquisition. Progress Energy has already said it will attempt to find a possible solution, adding it was disappointed with Ottawa's failure to approve the bid. It has described the deal as key to "the long-term health of the natural gas industry in Canada and the development of a new LNG export industry". Canada's opposition and analysts have also called for an explanation, as another big deal hangs in the balance. Canada has blocked two other major takeovers in recent years, including Anglo-Australian mining giant BHP Billiton's US$39 billion bid for fertiliser-maker Potash Corp. It has also raised fears over the proposed takeover of Calgary-based oil and gas company Nexen by China's state-owned CNOOC, which is being considered by Paradis. In a statement Friday, Paradis said he had sent a letter to Petronas indicating he was "not satisfied that the proposed investment is likely to be of net benefit to Canada". Paradis cited confidentiality provisions in the law but declined to provide further details.