Progress boss ‘very pleased’ deal approved
CALGARY – The federal government’s decision to allow multibillion-dollar foreign takeovers of Calgary-based Progress Energy Resources Corp. and Nexen Inc. was greeted with relief Friday.
“I’m very pleased that the Canadian government saw fit to approve the investment by Petronas,” said Progress president and CEO Mike Culbert.
Petronas has promised to keep all management and staff, Culbert said, and will accelerate investment both in shale gas production in northeastern B.C. and in a proposed liquefied natural gas export facility near Prince Rupert worth up to $11 billion.
Nexen promised to release a statement Friday night.
Along with the deals, the government introduced new rules Friday designed to clarify its criteria for allowing foreign takeovers.
It increased the threshold for Investment Act review to $1 billion (although the old $330-million threshold will remain in place for state-owned enterprises) and stated it will only consider future oilsands takeovers by state-owned companies in “exceptional” circumstances.
Greg Stringham, a vice-president for the Canadian Association of Petroleum Producers, said he expects the clarifications will pull investment off the sidelines.
“Not only did they approve the projects that had been applied for under the old rules, they really did answer the question on state-owned enterprises,” he said.
“It allows all the joint ventures and the partnerships and smaller acquisitions, partnerships and mergers to go ahead that have kind of been waiting back, wondering what those rules are going to look like.”
Last month, interim CEO Peter Sametz of Calgary-based Connacher Oil and Gas Ltd. said uncertainty created by the federal government’s delay on the takeovers had hindered his search for a partner or buyer for the junior oilsands producer.
Stringham said the new rules don’t shut the door on any investments.
“I think in a way they did the best they could,” he said. “They could have come out with a big long list, a checklist, of here’s what you must do, but they do need still a little bit of flexibility to consider this.”