China-Canada oil deal shows more U.S. drilling needed: senator

Wed Jul 25, 2012 7:55am EDT
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By Roberta Rampton

WASHINGTON (Reuters) - Republican senators will unveil new energy legislation on Thursday that will help battle a new move by China to tap North American energy resources, Senator John Hoeven said.

China's state-owned oil company CNOOC Ltd. launched a $15.1 billion takeover bid for Canada's Nexen Inc, a company with operations in the Gulf of Mexico as well as in Canada's oilsands.

Hoeven said the deal shows the United States needs to do more to aggressively develop its own resources.

"If we don't get going on it, China's already moving. He who hesitates has lost," Hoeven told Reuters.

Hoeven's bill mirrors what the Republican-controlled House of Representatives has already passed, but the legislation will face an uphill battle in the Democratic-controlled Senate.

Hoeven said he believes the CNOOC-Nexen deal is a "direct result" of President Barack Obama's January decision to delay approval of the Keystone XL pipeline, designed to bring oil from Canada's oilsands to Texas refineries.

Obama said a portion of TransCanada's pipeline needed more environmental review. Weeks later, Prime Minister Stephen Harper said Canada needed to explore more opportunities to sell oil to China.

"This is really a direct result of the administration's resistance to Keystone," Hoeven said. Hoeven represents North Dakota, where oil production is booming. The pipeline would carry some of that oil to southern refineries.   Continued...