As more global trade wars loom ahead, the Canadian government is expected to make a decision in mid-October on CNOOC Ltd's $15.1 billion bid for Nexen, the Calgary-based owner of leases that account for approximately 5 percent of Canada's oil sand reserves.

Since 99% of Nexen's shareholders voted in favor of the bid and China National Offshore Oil Corp paid a premium of 60 percent over the market, the merger makes good business sense. Yet, some politicians in Ottawa are trying to derail the deal, while a recent national poll shows 69 percent of Canadians oppose it.

Critics have spread 'China Threat' conspiracy theories because CNOOC is a State-owned enterprise. Some lawmakers are playing into public fears to spark rising nationalist sentiments, although Canada has never been known for fanning the flames of fanatical patriotism.

Last week, Canada's main opposition party, the New Democrats Party, vowed to veto the deal in parliament and Prime Minister Stephen Harper had expressed some concerns as well.

Additionally, the Canadian federal government must vet the deal to determine if it's a so-called 'net benefit' for Canada. Government officials can block the bid based solely for political reasons, even if the merger economically benefits the North American country.

Media reports forecast that Harper would likely approve the bid, despite such stiff opposition since his ruling Conservative Party favors free trade and more foreign investments in the country.

Nevertheless, doubts linger because, "the Conservatives last blocked a deal in November 2010, when they shocked financial markets by preventing BHP Billiton Ltd from buying fertilizer maker Potash Corp, which is based in the western province of Saskatchewan," as reported by Reuters news agency.

Another stumbling block for CNOOC comes from south of the Canadian border as some US lawmakers have sought legal loopholes to block the bid. US Sen. Charles Schumer (D-NY) and Congressman Edward Markey (D-Ma) noted that 10 percent of Nexen's assets are in the US. They already asked US Treasury Secretary Timothy Geithner to block the deal. Yet at the very worst case scenario, CNNOC would simply divest its US holdings.

Despite such obstacles, CNOOC has made extraordinary efforts to alleviate Canadian concerns, while winning over an endorsement from Alberta Premier Alison Redford. The Chinese oil and gas giant has agreed to numerous concessions, which include: guaranteeing Canada jobs, boost capital spending and designating Calgary as its North American headquarters.

CNOOC also pledged to list 35 percent of its post-merger shares on New York and Toronto stock exchanges. The company must abide by Canadian laws and open itself to greater scrutiny.

It may seem that Canada, not CNOOC, would be the big winner, but upon closer inspection China comes out a winner too.

Nexen holds some of the best fracking drilling technology equipment, while China reportedly has 240 billion tons of accessible oil shale reserves, the largest in the world. CNOOC hopes to unlock massive oil shale reserves in the Changbai Mountain Range in Northeast China.

China is overly-dependant on oil and gas imports, while Canada remains a net energy exporter. Fracking drilling faces some environmental complications and Nexen could provide vital solutions to resolve such problems.

Besides, natural gas is a clean burning fossil fuel that can reduce coal and oil consumption. A shale gas revolution in China could improve air quality, boost energy supply and create many more jobs in shale gas-rich regions of the nation.

Accordingly, CNOOC has strong financial incentives to win Canada's approval. Additionally, Canada would get major cash infusion for more drilling in its oil sands region. Mr. Harper stands to win big in the long term if he moves forward and officially approves the CNOOC bid for Nexen.

The views do not necessarily reflect those of China Daily.

mcgregor@chinadaily.com.cn