Petronas makes new proposal to Ottawa for Progress Energy takeover

CALGARY – The Malaysian state-owned oil company trying to buy Progress Energy Resources Corp. (TSX:PRQ) has made a new proposal to Ottawa in hopes of winning approval for the $6-billion deal under the Investment Canada Act.

Petronas confirmed Tuesday it has made “made additional representations and submitted further undertakings” to the Canadian government, which rejected an earlier proposal.

The renewed attempt to win regulatory approval came as Petronas announced a one-month extension to the deadline for completing its takeover of the Canadian energy company. The new deadline is Dec. 30.

Under its agreement with Progress, Petronas may extend the deadline for another 30 days if regulatory approvals have been obtained.

The review of the new Petronas application comes as Ottawa continues its review of CNOOC’s $15.1-billion takeover offer for Nexen Inc. (TSX:NXY).

The Investment Canada review of the CNOOC-Nexen deal is set to end on Dec. 10, but may be extended in 30-day increments with the buyer’s consent.

Last month, Industry Minister Christian Paradis ruled the Petronas-Progress deal did not pass the key net benefit test imposed on large foreign takeovers of Canadian companies, but gave Petronas 30 days to submit a revised deal.

Progress focuses primarily on natural gas exploration, development and production in northeast British Columbia and northwest Alberta.

The takeover follows a deal between to companies last year that saw Progress and Petronas form a partnership to jointly develop shale natural gas in northeastern B.C. and look at exporting the gas in liquid form from the West Coast.

The partnership agreement helped give Progress the capital required to accelerate the development of its unconventional assets in the Montney formation.

After Progress accepted Petronas’ initial purchase offer of $20.45 per share, an unidentified rival bidder made an attempt that prompted Petronas to increase its offer to $22 per share.

Progress shares were down 13 cents at $19.92 on the Toronto Stock Exchange.