In 2011, Beijing-based Sinopec (China Petroleum and Chemical Corp) bought Calgary-based Daylight Energy Ltd for $2.2 billion. Last year, PetroChina became the first Chinese State-owned firm to wholly own Calgary-based Athabasca Oil Sands Corp for $674 million.

Recently, Sunshine Oilsands Ltd signed an agreement with China Oilfield Services Ltd for cooperation in developing multiple thermal fluid oil-sands exploration technology in Canada.

John Zahary, president and CEO of Calgary-based Sunshine Oilsands, the first Canadian oil-sands listing on the Hong Kong Stock Exchange, said while the CNOOC acquisition of Nexen is big, "it hasn't completely changed things".

"A significant majority of Nexen's assets are outside Canada despite the fact that Nexen is headquartered in Canada," he said. "Thus, the deal doesn't even have as much impact on Canadian oil industry as some smaller deals where the assets are in Canada."

From his office window, Zahary can see Nexen headquarters. After some recent exchanges with CNOOC executives at a local event, he described his new neighbor as "very friendly and eager to be part of the community".

Most of the Chinese investment has come from State-owned enterprises into Canada's natural resource projects, and it has drawn scrutiny and criticism from members of the governing Conservative Party and local environmentalists.

The CNOOC-Nexen deal took about five months for the government of Prime Minister Stephen Harper to review before approving it in December. While recognizing the importance of foreign investment in the country's economy, Harper described the decision as "not the beginning of a trend, but rather the end of a trend".

Some see the deal as a boost for Sino-Canada economic ties.

"The Canadian government approval is significant, it shows an understanding of the importance of being able to attract capital in the industry," said Zahary of Sunshine Oilsands.

Peter Harder, president of the Canada China Business Council, which focuses on facilitating bilateral trade and investment, said CNOOC's investment signals the "maturing" of the relationship of the two countries. "This transaction demonstrates a high level of bilateral economic cooperation and speaks to the important role of foreign investment in Canada's energy strategy and the development of Alberta's oil sands," said Harder.

The examination of the acquisition by CFIUS, the US committee that reviews sensitive deals by foreign investors, had sparked speculation among industry experts of a possible denial, but the committee approved it last month.

Many related it to CNOOC's failed attempt for an $18.5 billion bid for California-based energy firm Unocal Corp.

"CFIUS views every transaction separately from a national security perspective and it would not be reasonable to extrapolate from this clearance that another attempt by CNOOC to acquire Unocal (which failed in 2005) would now be approved," said Carl Valenstein, a Washington-based partner with the law firm Bingham McCutchen LLP.

"We are definitely seeing increased Chinese investment in the US, but Chinese investments in critical infrastructure and technology (telecommunications and energy in particular) will continue to be carefully scrutinized by CFIUS and other US agencies," Valenstein added.

Actions defended

CNOOC's Li defended the company's investment - and those by China's State-owned enterprises - early this month at a global energy conference in Houston.

"We are supposedly doing this because we want to haul every barrel of oil back to China, or have other agendas rather than commercial reasons," the CEO said in his first public speech since signing the Nexen deal. "Everyone with knowledge of the global market system can easily figure out that is not true, simply because this notion does not make any commercial sense."

"The only difference with our international peers is I speak better Chinese than the rest of my partners," Li said.

Alberta, where Calgary is located, has some of the largest known reserves of recoverable oil sands in the world, accounting for about 98 percent of Canada's oil reserves, ranking as the world's No 3 in proven crude-oil reserves, according to the Alberta government.

There were 127 operating oil-sands projects in Alberta as of January, five of which are mining.

Ed Whittingham, executive director of the Pembina Institute, a Canadian think-tank that advocates sustainable energy solutions, said that his organization will wait at least one or two years to see what actions will be taken by CNOOC.

Whittingham said Nexen's being "no leader in environmental performance" concerns him and his environmental peers, who believe the oil sands in Canada are "quickly becoming consolidated".

"We don't have any opposition to foreign companies acquiring Canadian ones in order to operate in the oil sands...(but) Any foreign investors should do more than just relying on compliance," he said.

"We need oil-sands operators to go beyond what's required of them by law, go beyond compliance, (to) the truly improved environmental performance, whether it be on land basis, water basis and air basis or climate basis," said Whittingham.

Licata, the New York based energy strategist, said he is encouraged by CNOOC New Energy Investment Co Ltd, a subsidiary founded in 2007 which engages in the development and utilization of renewable and alternative energies, citing it is making "big strides" in the advanced lithium battery and wind markets.

"I would like to see that expand as well as for the company to communicate those alternative energy initiatives better to investors," he said.