The Cabinet Committee on Economic Affairs (CCEA) today deferred nod to Indian Oil Corp's (IOC) proposal to acquire Malaysian firm Petronas' 10 per cent stake in a shale-gas assets and a liquefied-natural-gas (LNG) project in British Columbia for $900 million.
The CCEA deferred approval to IOC to buy the stake in Progress Energy Resources Corp for 1 billion Canadian dollars ($900 million), official sources said.
The acquisition, when approved, will mark IOC's maiden entry into North America.
The Malaysian firm, through its wholly-owned subsidiary Petronas International Corp, had in 2011 bought Canada's Progress Energy Resources Corp in a Canadian Dollar 5.2 billion deal to get the Altares, Lily and Kahta shale gas assets in north-eastern British Columbia.
In March 2013, it sold a 10 per cent stake in its planned liquefied natural gas facility and shale gas project to Japan Petroleum Exploration Co (Japex).
The Malaysian firm is planning to build a liquefied natural gas terminal off Canada's Pacific Coast, aimed at exporting natural gas to Asian markets. Progress Energy has more than 1.9 trillion cubic feet of proved and probable gas reserves in British Columbia.
IOC's 10 per cent will come with an offtake agreement for the Indian energy company. IOC is looking to expand its protfolio of exploration and producing assets while Petronas wants to share some of its costs.
IOC, which had previously ventured into overseas oil and gas exploration and production with state-owned explorer OIL India Ltd, is currently talking to Petronas alone. There has been no decision so far on taking OIL on board for the acquisition.
Shares of IOC closed at Rs 257.15, down 0.45 per cent on the BSE stock exchange.