Harper sheds no light on why Ottawa spiked Petronas deal, promises clarity soon

OTTAWA – Prime Minister Stephen Harper says his Conservative government still intends to review and clarify Canada’s standards for foreign investment.

But he offered little explanation for why Industry Minister Christian Paradis rejected a proposed $6-billion takeover offer of Progress Energy Resources by Malaysian state-owned oil company Petronas.

Progress shares dropped 12 per cent in morning trading today in response to Ottawa’s decision, which was announced late last week.

Other Canadian energy players with deals in the works — notably, Nexen Inc. (TSX:NXY) and Celtic Exploration (TSX:CLT) — were also dragged lower.

Nexen’s proposed $15.1-billion takeover by China National Offshore Oil Co is subject to the same key net benefit test that nixed the Petronas-Progress deal.

Paradis’s ongoing review of the CNOOC-Nexen deal is set to end on Nov. 11, though it can be extended by 30-day increments with the buyer’s consent.

It remains unclear why the Petronas deal wasn’t deemed of net benefit to Canada — a test widely criticized for its lack of clarity and consistency.