FXstreet.com (Barcelona) - Petronas proposal to takeover Canadian-based Progress is likely to be eventually approved by the Canadian government, Charles St-Arnaud, Nomura economist notes. Petronas recently extended the closing date to 30 December. There is also another deal pending for approval between CNOOC and Nexen.

In terms of timing, "we believe that the Canadian government will announce its decision before the Christmas holiday, with the December 10 deadline being likely, and we also believe that the decision on both deals (CNOOC-Nexen/Petronas-Progress) will be announced at the same time, in order not to disrupt the equity market" Charles notes.

"With a total expected inflow of about C$20bn into Canada once the deals are approved, we believe that this approval would support the Canadian dollar in the coming months" the economist adds.