Nexen, Progress skid after Ottawa sets media briefing

Fri Dec 7, 2012 4:34pm EST
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By David Ljunggren and Louise Egan

OTTAWA (Reuters) - Shares of Nexen Inc and Progress Energy Resources Corp tumbled after the Canadian government scheduled a media briefing on Friday amid expectations that it would announce decisions on high-profile bids by China's CNOOC Ltd and Malaysia's Petronas to buy the energy producers.

The rulings would follow months of debate over how much of Canada's energy sector should be controlled foreign oil companies. Investors have watched closely developments. The government is also expected to release broad new guidelines on acquisitions of Canadian companies by state-owned enterprises,

CNOOC has offered $15.1 billion to buy Nexen, which has Alberta oil sands assets and offshore operations in the North Sea, Gulf of Mexico and Nigeria.

Petronas has bid C$5.2 billion for Progress, and the two are planning a West Coast LNG export project that could cost C$11 billion. The government already rejected the Progress deal once, and the bid was subsequently resubmitted.

Canada's Industry Ministry said it would hold a media briefing at 4 p.m. (2100 GMT) on Friday with information embargoed until 5 p.m., and Prime Minister Stephen Harper will make a statement at 5:15 p.m, the government said.

Industry Canada did not reveal the topic for the announcement.

Shares of Nexen Inc were down $1.67, or 7 percent, at $23.50 on the New York Stock Exchange, well under CNOOC's $27.50 bid price. The shares, which had been down as much as 16 percent, were briefly halted in Toronto after news of the announcement.

Progress sank 87 Canadian cents, or 4 percent, to C$19.38 in Toronto, after first falling about 8 percent. Petronas has bid C$22 for Progress, the Calgary-based natural gas producer.   Continued...

A woman walks into the Nexen building in downtown Calgary, Alberta, July 23, 2012. REUTERS/Todd Korol