* CNOOC, Petronas decision still in near future
* Withdrawal, refiling in U.S. spark concerns about delay
* Harper's remarks suggest no Canadian delay expected
* Nexen price under pressure, Progress rises
By Randall Palmer
OTTAWA, Nov 28 Canada said on Wednesday it would
decide soon on two big foreign takeover bids for domestic energy
companies, despite possible delays in approval by U.S.
"We intend obviously to take decisions on a couple of
particular matters along with some more general guidance to the
marketplace. We intend to do that in the near future and that's
all I'll say about that," Prime Minister Stephen Harper said.
Harper has previously spoken about deciding in the
"not-too-distant future", the "very near future" and "very
Harper's government is studying a $15.1 billion proposal by
China's CNOOC Ltd to buy Nexen Inc
and a C$5.2 billion ($5.3 billion) bid by Malaysia's Petronas
for Progress Energy Resources Corp.
Nexen's share price has been under pressure because of
concern that a CNOOC-Nexen announcement on Tuesday that they had
pulled their application for U.S. approval and then refiled it
might mean a longer wait before the deal can be
Canadian Industry Minister Christian Paradis declined to
answer when asked if the new review, under the Committee on
Foreign Investment in the United States (CFIUS), would mean
Canada would delay its own approval process.
But Harper's subsequent remarks to reporters suggested that
Ottawa was not planning to push back its timetable, and that the
decisions on CNOOC and Petronas would come at the same time as
an overall framework on foreign investment.
Pundits have assumed that all three decisions will come by
the Dec. 10 deadline for deciding on whether to allow the CNOOC
bid, although technically the government can extend that
deadline if CNOOC and Nexen agree.
Canada is trying to balance the need for foreign investment
to develop its natural resources with concern that China might
take over large chunks of the energy patch and that
government-owned firms will not play by free-market rules. Both
CNOOC and Petronas are state-owned.
The market was not totally sure what to make of the
CNOOC/Nexen move to pull and refile their application to CFIUS,
but analysts noted that the news release did not refer to
closing the deal by end-year but spoke merely of "completing the
CFIUS review process as expeditiously as possible."
The possible delay stems from the fact that the resubmission
restarts the clock, which allows in theory up to another 75 days
for the United States to decide.
However, the first words of the release stated that the
resubmission was "by mutual agreement" with CFIUS, and one
source close to the deal said: "This is considered routine."
One investor, who asked not to be identified because of the
sensitivity of the negotiations, said he understood that at
least one U.S. concern was about who could work on Nexen-linked
oil rigs in the Gulf of Mexico that are near U.S. military
"I don't think the U.S. CFIUS issues are nearly as important
or as sensitive (as the Canadian concerns)," he said.
Nexen closed 0.9 percent lower in New York at $23.98, well
below CNOOC's $27.50 offer. Progress ended up 1.5 percent at
C$20.01, closer to the C$22 Petronas offer price.
The relative premium on Progress shares may reflect the view
that a Malaysian firm is less of a concern than one from China,
that it submitted a revised bid after discussions with Canadian
officials and concerns over the length of the U.S. process for
approving the CNOOC deal.