As Canada debates China oil bid, U.S. review kept under wraps

Wed Nov 21, 2012 12:08pm EST
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By Roberta Rampton

WASHINGTON (Reuters) - While the debate has been fierce in Canada over whether a $15.1 billion takeover bid by China's CNOOC (0883.HK: Quote) for Canadian oil company Nexen Inc NXY.TO is in the national interest, a much quieter U.S. review of the deal could soon come to a head.

A panel chaired by Treasury Secretary Timothy Geithner has been looking at the national security implications of a Chinese state-owned oil company taking over Nexen's U.S. assets, which include oil platforms in the Gulf of Mexico.

In theory, enough time has elapsed for the Committee on Foreign Investment in the United States (CFIUS) to have finished its work.

But there has been no word on whether the review has concluded. By law, CFIUS and the Treasury Department are forbidden from commenting on reviews, and leaks about their deliberations are rare. A CNOOC spokesman said the company is declining to comment on its filing.

Lawyers with expertise handling CFIUS cases cautioned against drawing any conclusions from the amount of time that has elapsed since the review started, explaining it will be up to CNOOC to disclose the results at a time of its choosing.

The closely guarded review stands in contrast to the political firestorm and abundant headlines surrounding Canada's much broader process. A number of members of the governing Conservative party have openly expressed concerns about a Chinese state-owned company owning Canadian oil resources.

Ottawa has said it will rule by December 10 on the deal, and new government rules for foreign investment are expected around the same time.

Investors looking at opportunities for further Chinese investment in the booming North American energy sector are intently watching both reviews, said Joshua Zive, senior counsel at Bracewell & Giuliani, a law and lobbying firm.   Continued...