(Adds details on deal, background)
TORONTO, Oct 11 (Reuters) - Canada extended its review of aChinese state-owned company's $15.1 billion bid for Canadianenergy producer Nexen Inc by 30 days on Thursday,giving the government more time to consider the merits of CNOOCLtd's controversial proposal.
"The proposed transaction is undergoing a rigorous reviewunder the Investment Canada Act," said Christian Paradis,Canada's industry minister, in a brief statement announcing theextension. "The required time will be taken to conduct athorough and careful review of this proposed investment."
The extension, while expected, comes amid festering concernsabout the deal. Many Canadians fear that a successful bid by theChinese state-owned company could spark a wave of mega takeoversof Canadian energy producers by foreign enterprises.
The oil sands of the Western Canadian province of Albertaare the world's third-largest proven oil reserve. Nexen'sportfolio includes operations in the oil sands, shale gas in theprovince of British Columbia and other assets spread across theglobe.
The government must weigh the takeover concerns against theenergy sector's pressing need for foreign investment. By someestimates, Canada requires more than C$600 billion ($612billion) of energy investments over the next decade, and much ofit will have to come from outside the country.
CNOOC's proposal, launched in July, carries a higher pricetag that any other foreign takeover bid attempted by a Chinesecompany.
Under the Investment Canada Act, the government is requiredexamine all deals worth more than C$330 million to determine ifthey will bring a "net benefit" to the country.
The act provides for an initial 45-day review period, whichcan be extended by an additional 30 days. In some cases, reviewsare extended further.
The government last blocked a foreign takeover deal in 2010when it stunned markets by preventing Australia's BHP BillitonLtd from acquiring fertilizer producer Potash Corp, which is based in the western province ofSaskatchewan.
(Reporting by Euan Rocha; Editing by Frank McGurty; and PeterGalloway)
Keywords: NEXEN CNOOC/CANADA