In the past three years, CFIUS has blocked at least three transactions that would have resulted in Chinese companies gaining control of assets near military facilities.

Cnooc and Calgary-based Nexen said November 27 they had agreed to withdraw and resubmit their application to CFIUS on the US part of what is mostly a Canadian transaction. Discussions with the interagency committee, headed by Treasury Secretary Timothy Geithner, are continuing, Nexen said. The Canadian review of the deal is scheduled to end by December 10.

The companies are probably discussing what’s known as a national security agreement that could resolve the committee’s concerns and still allow the transaction to be completed, said Jalinous, a partner with Kaye Scholer. Such an agreement might restrict access by the non-US owner or set other limitations that would curtail control of the facility, he said.

The Naval Air Station Joint Reserve Base at Belle Chasse, Louisiana, about 12 miles southeast of New Orleans, is used for training exercises over land and water for an array of fighter aircraft, according to public affairs officer Andrew Thomas.

The base is home to a Marine Corps battalion, a Coast Guard air station, Navy training and transport units and fighter squadrons ready for immediate response to any threat. The 159th Fighter Wing of the Louisiana National Guard, which sent forces into Iraq and Afghanistan, is also based at Belle Chasse.

Cnooc, based in Beijing, may need to agree to sell assets deemed most sensitive, said Baker, a lawyer with Steptoe & Johnson in Washington who also specializes in CFIUS representation.

“If the Defense Department is worried that you’re too close, that’s very hard to fix,” he said. “They might require a divestiture just of those platforms.”

Peter Hunt, a spokesman for Cnooc in Canada, declined to comment on the CFIUS review.

Nexen’s platforms in West Delta, the closest offshore region to the base, are part of shallower operations in the Gulf’s shelf that the company deems “mature” and for which Nexen planned minimal investment this year as it focuses on deep-water spending, according to its 2011 annual report.

Production from Nexen’s platforms on the West Delta leases is “quite small,” about 400 barrels a day, a Nexen spokeswoman said.

The company operates five producing platforms on blocks 44 and 45, a sixth that enables exports to pipelines and another that serves as a communication office, Lewis said, declining to comment on the CFIUS review.

Cnooc could easily sell Nexen’s Gulf of Mexico interests without compromising the takeover, said Timothy Parker, a portfolio manager at T Rowe Price International in Baltimore, who holds Nexen shares.

Nexen rose 2.9 per cent to US$25.17 in New York on Thursday. That was 8.4 per cent less than Cnooc’s bid of US$27.50 a share.

“The Gulf of Mexico stuff is almost a side show,” Parker said. “If they closed a deal on the condition they sell it, I don’t think it would be a bad outcome.”

Nexen produces the equivalent of about 14,500 barrels of oil a day in the Gulf of Mexico, about 8 per cent of the company’s total production, according to third-quarter results released October 25. That’s one-tenth of 1 per cent of the total 1.3 million barrels of oil a day produced by companies last year in the US portion of the Gulf, a region that accounts for 7 percent of the country’s output, according to the US Energy Information Administration.

A CFIUS spokeswoman at Treasury declined to comment on whether the committee is concerned about the proximity of the Nexen assets to the Belle Chasse air station, saying the CFIUS review process isn’t public.

Lieutenant Colonel Elizabeth Robbins, a spokeswoman for the Pentagon, also declined to comment.

The company’s other operations include oil and gas production in Nigeria and the North Sea, as well as at the Long Lake oil-sands project in Alberta, where it already produces crude in a joint venture with Cnooc.

The acquisition would give Cnooc the largest stake in the North Sea’s Buzzard oil field, which “has increasingly influenced” global oil prices, according to a memo Canada’s top civil servant sent the country’s prime minister. The Chinese government’s stake in Canada’s largest oil-sands project in production, Syncrude, would rise to 16 per cent, according to the briefing note, obtained by Bloomberg News under the nation’s Access to Information Act.

Previous deals stopped by CFIUS include a bid by a Chinese government-controlled company, Northwest Ferrous International Investment, to acquire a 51 per cent interest in Nevada gold mine Firstgold that was dropped in December 2009, after the CFIUS committee said it would recommend blocking the transaction because it involved assets located within 50 miles of the Fallon Naval Air Station in Nevada.

In May, CFIUS forced Far East Golden Resources Group, a subsidiary of Chinese firm Hybrid Kinetic, to divest its majority interest in US mining company Nevada Gold Holdings, which is also near the Fallon air station, almost two years after the companies closed the transaction without reporting it to the review panel.

Applying for CFIUS review of a transaction is optional. The committee, which has the authority to examine a deal that hasn’t been filed voluntarily, reviews less than 10 per cent of foreign takeovers, according to Washington-based law firm Wiley Rein.

On September 29, President Barack Obama barred a Chinese-owned company from building wind farms near and within restricted airspace used by the US Naval Air Station at Whidbey Island, Washington, the first time in 22 years a president has issued a formal order blocking a transaction as a national security risk.

Cnooc agreed on July 23 to buy Nexen. If completed, the acquisition would be the largest overseas takeover by a Chinese company. It’s Cnooc’s biggest attempt at a North American deal since it walked away from Unocal Corp., an oil-and-gas company, under congressional pressure.