OTTAWA Canada's main opposition party criticized how the government is handling a $15.1 billion bid by China's CNOOC Ltd for Canadian oil producer Nexen Inc on Thursday, underlining how politically sensitive the matter has become.
The Conservative government is probing the offer -- China's richest foreign takeover bid yet -- to see if it is of net benefit to Canada.
Political sources say the cabinet is split over the CNOOC deal, in part because of concerns that China would gain more control over Canada's energy patch.
The left-leaning New Democratic Party (NDP), which has long complained that the net benefit test is too opaque, demanded open hearings into the proposed takeover and noted that two former aides to Prime Minister Stephen Harper were lobbying the government on behalf of CNOOC.
Peter Julian, the party's natural resources spokesman, cited an online Abacus Data poll last week that found that 57 percent of respondents opposed the deal.
"When we look at how the Conservatives seem to be approaching this takeover, they seem to be doing it in a non-transparent and irresponsible way," Julian told a news conference.
"There are more and more Canadians who are concerned about this takeover ... we believe it is in the public interest to have a transparent and thorough review."
Although Ottawa is supposed to say nothing during the review period, Harper made clear last week that reciprocity and Canadian public opinion would be important factors in the government's decision.
Some critics complain China needs to open up more to Canadian businesses if it wants to continue buying energy assets in Canada.
Julian said the New Democrats would decide whether to back the bid after consulting energy workers and others who could be affected.
"Certainly we're concerned about the impact on employment," he said.
Industry Minister Christian Paradis, charged with taking the final decision on CNOOC, said the review process is sound.
"We have no lessons to take from the NDP, whose reckless economic policies will deter investment, kill jobs, and hurt Canadian families," he said in a statement.
Harper went to China in February to sell the idea of buying Canadian oil while other ministers say $500 billion ($505 billion) in investment is needed to ensure Canada's natural resources are developed properly over the next decade.
The CNOOC bid is a big test of the government's assertions that Canada is open to foreign investment.
Harper blocked a bid by BHP Billiton for fertilizer producer Potash Corp in late 2010 amid pressure from the province of Saskatchewan, where Potash Corp is based.
On Thursday, a Canadian official revealed that Ottawa will take environmental protection into account in deciding on the CNOOC bid.
"Net benefit makes sure that our resource sector will be well looked after," Junior Finance Minister Ted Menzies told reporters.
Referring to foreign energy firms operating in Canada, he added: "We make sure that they treat the environment with respect, make sure that they do due diligence and look after the environment as they are doing it."
The remarks were the first time any government official had mentioned the role of the environment in the review process.
Nexen is one of several oil companies operating in the tar sands of northern Alberta, one of the world's biggest deposits of crude. Oil sands production has been criticized severely by environmentalists for its carbon emissions and its impact on surrounding ecosystems.
(Reporting by David Ljunggren; Editing by Peter Galloway)