Petronas seeks to win over Canada on Progress bid-FT

Sun Nov 11, 2012 10:49pm EST
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KUALA LUMPUR Nov 12 (Reuters) - Malaysia's Petronas aims to overcome Canada's opposition to its $5.2 billion bid for Progress Energy Resources by adding more independent directors to the board of the gas producer, the Financial Times reported.

The newspaper cited the Malaysian state oil firm's chief executive Shamsul Azhar Abbas as saying in an interview that Petronas was prepared to make the move to soothe Canada's concerns about a lack of transparency after the takeover.

Canada blocked Petronas's bid for Progress last month, with Industry Minister Christian Paradis saying it was unlikely to bring a "net benefit" to the country. Petronas and Progress are planning a multibillion-dollar liquefied natural gas plant on Canada's West Coast.

Petronas has said it plans to make further submissions to win approval.

"We've told them if you want more transparency from us we're prepared to increase the number of independent directors (on the Progress board). It's good governance," Shamsul was quoted as saying by the newspaper.

Shamsul also said Petronas as a whole had become more transparent since he took over in 2010, even though he reported ultimately to Malaysian Prime Minister Najib Razak.

"In terms of governance and transparency we are not a publicly listed company but we behave as one. There is no interference from the government," Shamsul said.

Petronas is Malaysia's largest single taxpayer and its biggest source of revenue, covering as much as 45 percent of the government's annual budget.

Shamsul said Petronas has been in talks to cut special dividend payments to the government, which amounted to 28 billion ringgit last year. The dividend would be cut next year by a billion ringgit and likely fall further each year, he said.