"If the deal is denied then the NDP can try to take credit for denying the deal. If the deal goes forward then they can campaign on the fact that Stephen Harper doesn't listen to Canadians," said Duane Bratt, professor and chair of the policy studies department at Calgary's Mount Royal University.
Few people cried foul when the deal was proposed in late July. But the issue of foreign state-owned players acquiring stakes in Canada's oil patch has gained momentum and become increasingly contentious.
Some senior cabinet members in the Harper government have expressed concerns over the deal's potential to trigger more foreign takeovers, while most observers who support the deal appear to want strict conditions attached.
In a recent survey of Canadian corporate executives, only 42% of 152 respondents said they would support the deal without conditions, while 50% said they would oppose the deal without conditions.
Alberta Premier Alison Redford is also reported to have written to Industry Minister Christian Paradis asking him to ensure Canadian jobs will be protected and a mostly Canadian management team maintained.
Mr. Harper is not bound by the NDP's position in any way as the process is a bureaucratic one entirely contained within Industry Canada that does not involve a Parliamentary vote.
The opposition has, however, served to galvanize public resistance against allowing China's largest foreign takeover attempt to date to proceed.
Peter Julian, the NDP's natural resources critic, told The Canadian Press in Ottawa that the deal raises questions about the future of Canadian jobs and the location of the new company's head office. CNOOC has promised both to retain all of Nexen's approximately 3,000 employees and to keep Calgary as its hemispheric headquarters.
In a statement, Mr. Paradis called Mr. Julian's comments "reckless and irresponsible."
"By attempting to politicize the review process they are creating the kind of uncertainty that scares off the investment Canadian companies rely on to create jobs, innovate and compete," he said.
The NDP's position is reminiscent of the stand taken in 2010 by Saskatchewan premier Brad Wall when he opposed BHP Billiton Ltd.'s $40-billion takeover of Potash Corp. of Saskatchewan Inc.
Mr. Harper rejected the Potash bid, invoking the "net benefit" clause of the Investment Canada Act for only the second time since it came into force in 1985. On Thursday, Mr. Harper agreed the Nexen transaction also "raises a range of difficult policy questions," telling reporters in Ottawa they will "all be taken into account" when his government issues a decision, which is expected by mid-November.
The situation appears to have pushed the prime minister into a tight corner with limited options. Rejection of CNOOC's bid would make months of courting more Chinese investment appear disingenuous at best. But approval without conditions would provide fodder for the Mr. Harper's political enemies.
" is a leadership challenge to be sure," said Gordon Houlden, director of the University of Alberta's China Institute and former director-general of the East Asian Bureau of the federal Department of Foreign Affairs and International Trade. "The challenge for the Harper government now is how to bring Canadians to understand the high desirability of having a strong economic link with China."
Nexen is also not the only Canadian energy firm facing down an Asian state-owned suitor. Malaysian state-owned Petronas has offered nearly $6-billion to buy Calgary's Progress Energy Resources Inc.
ILLUS: Color Photo: /; Color Photo: /; Chart/Graph: Source: Bloomberg News Andrew Barr, National Post / NEXEN INC. (NXY/TSX)