12/07/2012 05:18 EST | Updated 12/07/2012 05:54 EST

Petronas Progress Takeover Gets Green Light From Harper Government


Industry Canada has approved the takeover of Alberta-based Progress Energy Resources by Malaysian fuel giant Petronas.

The government announced the decision on Friday afternoon, just six weeks after it rejected an earlier takeover proposal from Petronas.

Petronas resubmitted its bid for Progress Energy last month, saying it had "made additional representations and submitted further undertakings" in order to get Ottawa's approval.

The two companies announced earlier this week they would expand a planned liquefied natural gas they are planning in British Columbia if the deal were to be allowed.

The Progress-Petronas deal, along with the CNOOC-Nexen deal, which was also approved on Friday, drew a great deal of controversy, with many critics saying Canada shouldn't sell energy assets to state-owned foreign corporations.

The Canadian Press reports:

OTTAWA -- The federal government has approved the takeovers of two Canadian energy companies by Asian state-controlled firms.

Ottawa signed off on the takeover of Calgary-based Nexen by China's CNOOC and Progress Energy Resources by Malaysia's Petronas late Friday afternoon.

But in a wide-ranging update of foreign takeover rules, it has said it will only consider future takeover deals in the oilsands by state-owned companies in exceptional circumstances.

And all state-owned enterprises seeking to buy large Canadian companies will face greater scrutiny about how they operate and how much control their home governments would have over how they do business.

Prime Minister Stephen Harper says foreign state control of oilsands development has reached the point where further control would not be beneficial to Canada.

He says while Canada is open for business to foreign investors, it's not for sale.

CNOOC launched it's friendly $15.1-billion bid for Calgary-based Nexen in July, providing a series of guarantees to the Canadian government on job creation, head office location and corporate governance.

In a statement, Industry Minister Christian Paradis said he was satisfied that the deal would be a net benefit to Canada.

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