In an interview with the Financial Post, Mr. Culbert said representatives from both companies are on their way to Ottawa to meet with Industry Canada officials and are motivated to iron out any outstanding issues.
“I am pleased to say that over the weekend Progress and Petronas had a lot of discussions, and Petronas is very much engaged and once they were over the shock, like the rest of us, we were looking for further communication with Industry Canada to see if the issues could be resolved in a mutually agreeable way in a fairly short timeline,” he said.
“My feeling today is that I have a lot more positive outlook that the issues at hand” will be resolved, he said.
On Friday, the Minister of Industry rejected the Malaysian company’s bid to buy Progress Energy for $5.9-billion, but left the door open for Petronas to amend its offer and present it to the government within 30 days.
Mr. Culbert couldn’t explain the reasons that led to the rejection because Petronas is the party that is interacting with Industry Canada, but said: “I think, like a lot of these things, a communication breakdown is probably the underlying issue.”
Sources say Ottawa asked Petronas at the 11th-hour for a delay until Dec. 7 to rule on its bid to take over Progress, so it can finalize a new policy on foreign takeovers, particularly those involving state owned enterprises.
In a conciliatory move, Petronas agreed on Monday to extend its deadline by up to 90 days to close the $5.2-billion acquisition of Progress, one of the largest owners of exploration lands in the gas-rich Montney shale region of British Columbia. That would give Canada more time to develop a set of long-promised guidelines on foreign investment, especially by state-owned enterprises such as Petronas, as Ottawa also scrutinizes a much larger and more contentious transaction, the US$15.1-billion takeover of Nexen Inc by China’s CNOOC Ltd.
But Petronas couldn’t agree because its deal with Progress expires Oct. 31 and needs the approval of the boards of both companies to be extended.
Mr. Culbert expressed confidence that the deal is in Canada’s interest.
“I think that it’s very easy to see that by developing our shale gas opportunities in Western Canada, by developing a new export business industry for Canada, that ultimately this is very positive for Canadians,” he said.
Petronas plans to build a terminal on the British Columbia coast to liquefy natural gas found by Progress in shale formations and export it on tankers to Asian customers.
In Ottawa, Prime Minister Stephen Harper said his government would unveil a set of guidelines for foreign investments.
Mr. Harper told a news conference that the guidelines would be unveiled at about the same time Ottawa decides on the fate of both the Progress deal and CNOOC Ltd’s much bigger proposed takeover of Nexen Inc.
“We’ll give more details on our framework very soon but this government welcomes the great majority (of foreign investment) — not all investments because in certain cases we have said no and we reserve our right to do that,” he said.
Mr. Harper also said the government would not comment further on the Petronas deal, which is now subject to a 30-day review period.
Original Article
Source: financial post
Author: Claudia Cattaneo
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