OTTAWA (Reuters) - Canada's main opposition party on Thursday demanded that the government reject a landmark $15.1 million bid by Chinese state-owned CNOOC Ltd for oil producer Nexen Inc, saying it could provoke "a tidal wave" of foreign takeovers.
The comments by the center-left New Democrats (NDP) highlighted that there are still risks to the CNOOC bid, China's largest ever proposed foreign takeover, and helped knock almost one percent off Nexen shares.
The NDP has no power to block the bid, but Conservative Prime Minister Stephen Harper says Ottawa will take public opinion into account when deciding whether the proposed takeover is in the net benefit of Canada.
Some legislators in the ruling Conservative Party are also uneasy about the idea of a Chinese state-owned enterprise buying up more Canadian oil assets. Canada has the world's third largest proven reserves of oil and is a major energy exporter.
NDP natural resources spokesman Peter Julian complained the process to determine net benefit was far too vague and would not deal with questions about issues like jobs, human rights, national security and the environment.
"Public confidence in the government's ability to actually handle this transaction fairly, to do it in a transparent way, has eroded," he told a news conference.
"The New Democratic Party cannot support the rubber stamping of the CNOOC takeover of Nexen. We cannot see the net benefit."
Nexen shares, began to drop after Julian started speaking at 10 am (1400 GMT) were at C$24.99, down from C$25.17 previously. They later slipped further to C$24.96, while the benchmark Toronto index was by 0.6 percent.
Fund managers and analysts still expect Ottawa to approve the deal, albeit with conditions.
Julian, who wants the government to hold public hearings on the bid, cited what he said was the risk of "a number of other takeover deals that are pending. Some people have said it's a tidal wave of takeovers that are coming down the pike".
Industry Minister Christian Paradis, ultimately responsible for deciding whether to approve the CNOOC bid, said the NDP's actions were 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 in a statement.
The government says the energy patch needs C$630 billion ($643 billion) in investment over the next decade alone and much of it will have to come from outside Canada.
The NDP said it could not support the deal as it was currently structured. Julian did not say exactly what changes he was looking for.
The New Democrats, Canada's most left wing mainstream party, unexpectedly became the official opposition for the first time last year.
The NDP said its stance on Nexen was based both on the deal itself and on broader concerns about the pace of development in northern Alberta's oil sands, one of the world's biggest crude oil deposits, where Nexen has a small stake.
"We have to be strategic. The resources are going to be there," NDP industry spokeswoman Helene LeBlanc told reporters. "They're not going away, and I think we can be strategic...(on) the rate of development of the natural resource."
The Conservative-dominated House of Commons rejected an NDP motion on Wednesday that demanded public consultations on the CNOOC deal. The vote was 145 against the motion to 125 for it.
($1=$0.98 Canadian)
(Reporting by David Ljunggren, Randall Palmer and Louise Egan; Editing by Janet Guttsman)
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