UPDATE 7-Canada blocks $5.2 bln Petronas bid for Progress Energy
* CNOOC's C$15.1 bln bid for Nexen thrown into question
* Progress chief says disappointed, will consider remedies
* Conservative government says it is still open for business
* CNOOC spokeswoman in Beijing says she has no comment
By Euan Rocha and Stuart Grudgings
TORONTO/KUALA LUMPUR, Oct 20 (Reuters) - Canada has blocked Malaysian state oil firm Petronas' C$5.17 billion ($5.2 billion) bid for gas producer Progress Energy Resources in a surprise move that could signal problems for a much larger Chinese deal in the country's energy sector.
Canada's announcement late on Friday, minutes before a deadline, was a blow to Petronas, whose domestic oil supplies are shrinking and which has been seeking to boost its resources beyond Malaysia and volatile areas such as Sudan.
It also raises doubts over Chinese oil group CNOOC's C$15.1 billion offer for oil producer Nexen and could weigh on other Canadian firms hoping for foreign investment to tap their vast energy reserves.
A rejection of the CNOOC bid would likely damage trade ties Canada has been trying to build with China, underlining political sensitivity to Chinese corporate expansion in North America. Continued...