The third-ranking Senate Democratic leader today urged the Obama administration to block a Chinese state-owned oil company's bid to purchase a Canadian energy firm until Beijing makes greater strides toward opening up to foreign investment.

Sen. Charles Schumer (D-N.Y.) made his call to halt the buyout of Canada's Nexen Inc. in a letter to Treasury Secretary Tim Geithner, leader of the federal Committee on Foreign Investment in the United States (CFIUS) that examines significant American asset purchases made by overseas interests.

Schumer's support for halting the $15.1 billion takeover proposal by China National Offshore Oil Corp. (CNOOC) comes seven years after he led the charge against its $18.5 billion offer to buy Unocal Corp., a deal famously scuttled by trade concerns among lawmakers in both parties.

"I sincerely hope the CNOOC-Nexen deal can be approved, and that Chinese companies will continue to increase their investment in the United States," Schumer wrote to Geithner. "But I urge you not to miss this opportunity -- the largest foreign acquisition ever by a Chinese company -- to hold China to the commitments it has made to provide a level playing field for US companies seeking to access Chinese markets."

Congressional Republicans have charged that the CNOOC-Nexen deal is a consequence of President Obama's delay in approving the Keystone XL pipeline between Canada's oil sands and Gulf Coast refineries, billing the buyout as a sign of China's eagerness to supplant America as a primary user of Alberta's heavy crude. Chinese companies have long courted Canadian oil and gas interests, however, and less than 30 percent of Nexen's assets are located within Canada (EnergyWire, July 27).

Indeed, it is Nexen's offshore holdings in the Gulf of Mexico that empower CFIUS to examine the deal and give Geithner the power to raise potential objections.

Among the tangible demands that Schumer proposed making of China as a condition to permit the Nexen deal are expanded enforcement of alleged intellectual property violations and the narrowing of its criteria for foreign investment reviews to only national security concerns.