The government, however, emphasized the limited scope of its approval of the CNOOC deal and a related decision Friday to green-light the purchase of natural gas producer Progress Energy Resources Corp by Malaysia's state-owned oil and gas giant Petronas. Regulators in Ottawa had ruled against the proposed transaction in October.

"When we say that Canada is 'open for business', we are not saying Canada is up for sale to foreign governments," Prime Minister Stephen Harper said at a news conference following the Industry Ministry's announcement.

In line with Harper's sentiment, the ministry also said Friday that future decisions would be subject to strict new rules on investment in Canada by government-owned foreign companies. (A delay in drafting the revisions had been cited as the reason for holding up a decision on the Nexen acquisition.)

CNOOC has said it will absorb about $4.3 billion in Nexen's debt as part of the deal.

The Chinese company has for years signaled its desire to buy energy assets abroad. It attempted to acquire US-based Unocal Corp in 2005 for $18.5 billion but later abandoned that bid under pressure from political leaders in Washington citing national-security concerns.

In 2011, Nexen and Beijing-based CNOOC jointly invested $2 billion to develop oil sands on Alberta's Long Lake, a partnership that set the stage for the takeover. CNOOC's first investment in Canada was a 17 percent stake in oil sands developer MEG Energy Inc in 2005.

The Nexen deal raises CNOOC's proven reserves by 30 percent, the company has said. It currently has about nine years' worth of proven reserves based on current production.

Special Coverage:

Chinese Companies' Overseas Footprint

Timeline:

CNOOC joins Nexen in Gulf JV Mexico JV -- Dec 2, 2011

CNOOC's Nexen deal expected to open two-way street -- July 25, 2012

CNOOC to stick to market procedures in Nexen deal -- July 27, 2012

CNOOC pushes ahead with Nexen acquisition --Aug 22, 2012

Nexen schedules vote on CNOOC's $15.1b offer -- Aug 27, 2012

CNOOC Nexen bid 'net benefits' Canada and China -- Oct 9, 2012

Canada extends review of CNOOC's Nexen bid -- Oct 12, 2012

CNOOC's Nexen bid review extends another 30 days -- Nov 5, 2012

Nexen deal approval 'in sight' -- Nov 10, 2012

CNOOC, Nexen reapply for US deal approval -- Nov 28, 2012

Nexen deal resubmission part of approval process -- Nov 30, 2012