If at first you don't succeed, head north to Canada.

After failing to buy Californian driller Unocal for nearly $20 billion in 2005, CNOOC (CEO), the Chinese state-backed oil giant, has agreed to buy Canada's Nexen (NXY) for $15.1 billion in the largest-ever Chinese acquisition of a foreign energy company.

CNOOC's $27.50 per share offer for Calgary-based Nexen comes at an over-60% premium to the company's Friday close and signals that the existing Chinese buying wave in niche drillers -- as well as a web of oil and gas joint ventures in North America -- may yet morph into mega-sized M&A. The deal highlights China and its state-owned oil giants' hunger for new oil and gas exploration assets amid a projected increase in the country's energy consumption. State-backed drillers like CNOOC, PetroChina (PTR) and Sinopec (SHI) have been acquiring oil and gas assets around the world, gaining access to many promising deepwater and shale drilling basins.

The argument against outright acquisitions of domestic energy assets for national security reasons forced the Chinese oil giants to be quiet and persistent buyers of North American oil and gas assets, cutting investment deals with some of the biggest independent oil and gas companies in the US, Chesapeake Energy (CHK) and Devon Energy (DVN), across the Canadian oil sands -- one of the most-desired regions for investment and where Nexen has exposure -- and with niche drillers in Canada like Daylight Energy, which was acquired by Sinopec last year.

Even though Monday's landmark bid for Nexen will face Canadian regulatory review, Chinese energy acquisitions may remain a more relevant prospect in Canada, with joint ventures remaining the preferred way to gain access to US-based asset sellers like Chesapeake Energy.

"There are lot more deals in Canada, and they don't translate to our public markets," says Subash Chandra, an oil and gas analyst with Jefferies. He notes that outright Chinese M&A tends to be "bottled up" in Canada, with few large-scale transactions in the US.

According to Bloomberg data, Chinese oil giants are the second-largest acquirer of oil assets, behind US oil majors, cutting $35.6 billion of acquisitions last year. Notable Chinese deals include Sinopec's November acquisition of a 30% stake in Portuguese energy company Galp Energia's Brazilian subsidiary Petrogal Brasil, for over $5 billion, and a separate October acquisition of Daylight Energy, which holds 300,000 acres of shale oil and gas drilling assets, for $2.1 billion.

The interest in Canadian assets from Chinese state-run oil companies has been building. Last year, Petrochina signed a deal with Encana to buy assets in the Cutback region for $5 billion, a deal which would have been the largest-ever oil and gas acquisition in Canada by a Chinese company. That deal fell apart for undisclosed reasons.

CNOOC's bid for Nexen may still be worth watching for US investors and energy players. Benchmark analyst Mark Gilman said in November that Chinese M&A interest in North America is at least partially about acquiring the technological expertise required from complicated deepwater and shale drilling. The same could be said of ExxonMobil's (XOM) acquisition of XTO Energy, seen as not only an asset play but a shale drilling expertise and technology acquisition.

Gilman noted the key to deals will be the size of new shale finds and the emergence of new types of drilling methods like fracking. "You have to keep half an eye on the frequency on which new plays are emerging...In terms of shale, we are talking about a business that has emerged in the last two to three years and has exploded on the scene," said Gilman.

Sinopec's acquisition of a stake in Petrogal Brasil includes access to the Jupiter and Tupi offshore oil fields -- the largest oil finds in the western hemisphere since the 1970s. The push into what is known as the Brazilian pre-salt, adds to a legacy of Chinese oil ventures with established players in hard to drill areas.

More recently, Sinopec bought a 33% interest in five shale ventures owned by Devon Energy for $2.2 billion, giving it access and a drilling partner in prized shale assets like the Tuscaloosa Marine , Niobrara, Mississippian, Ohio Utica and the Michigan Basin shale formations.

The head of China's Sinopec was recently seated next to Chesapeake Energy CEO Aubrey McClendon at an NBA Finals game. Chesapeake Energy is looking to sell billions in shale assets as a way to meet a $10 billion-plus funding gap this year. There have been reports that the recent visit by Sinopec's CEO Fu Chengyu to Chesapeake's hometown of Oklahoma City was the prelude to an asset acquisition.

Estimates for the potential oil and gas trapped in Chinese domestic shale vary, but there are expectations that the Chinese energy companies will develop in the coming years a significant domestic shale drilling industry.

Unlike many Chinese acquisitions and joint ventures focused on assets in one drilling region or at least one country, Monday's acquisition of Nexen provides CNOOC access to oil and gas assets around the world, including in Canada, West African countries, and access to prized US-based Gulf of Mexico deepwater and continental shale drilling opportunities.

Cannacord Genuity analyst Phil Skolnick said the market is likely to see this as a positive indicator of the ability of Talisman Energy (TLM) to be acquired given it has a mixture of international assets (TLM's Asia assets in particular are potentially of interest). However, he noted that Talisman lacks the oil sands exposure of Nexen, which on its own makes Nexen a more attractive target. On Monday, Talisman announced that it was selling a 49% stake in its UK North Sea business to Sinopec for $1.5 billion.

Monday's deal could lead to a new round of regulatory hurdles for Chinese operators looking to gain control of US assets -- Nexen owns assets in the Gulf of Mexico -- after regulatory authorities and Congress blocked CNOOC's $18.5 billion bid for Unocal in 2005. There are those who believe the political resistance to outright acquisitions of North American assets by Chinese energy companies never made sense.

"The Unocal bid was derailed by negative press and myopic rhetoric by a few ignorant politicians," says Fadel Gheit an oil and gas analyst with Oppenheimer& Co., who notes that in the aftermath of the deal breakup, the country has remained a large investor in US energy assets. "CNOOC has invested in unconventional JVs with US independents, which benefit both and should increase our domestic production," adds Gheit. The analyst believes Chinese firms should be able to invest more freely in the US since oil is a global business.

Even if outright M&A may remain politically challenging in the US, Chinese players like CNOOC, Sinopec and PetroChina will continue to test the waters. "CNOOC is sitting on a pile of cash and has been aggressively seeking energy acquisitions for the last five years, reflecting China's hunger for energy and oil in particular, and I expect this trend to continue," says Gheit.

In November Bloomberg reported that Marathon Oil (MRO) was in talks to sell its Angolan offshore operations to Sinopec and other Asian buyers for $800 million. Reports also indicate that Marathon may look to sell 30% of a joint venture in its Gulf of Mexico deepwater assets for $1 billion to Asian buyers as part of the Houston -based company's announced plans of oil asset sales up to $3 billion.

If the deals were to go through, it wouldn't be Marathon's first sale to Chinese buyers. In 2009, state-backed oil companies Sinopec and CNOOC bought a 20% stake in a promising Angolan deepwater oil prospects from Marathon for $1.3 billion.

The political climate in Canada remains a wildcard for the Nexen deal. While Chinese state-run oil companies have had success in Canadian M&A in recent years, Canadian regulators blocked BHP Billiton's (BHP) $38.6 billion bid for Saskatchewan based fertilizer company Potash (POT) in 2010, a high-profile political end -- and M&A failure -- for what was slated to be a huge foreign acquisition of a Canadian company.

The key to the Nexen deal not suffering the same fate may be its far-flung assets.

"We don't expect there to be any regulatory issues as only 28% of Nexen's production is in Canada. Plus there is an agreement to retain NXY's management team and for CNOOC to establish Calgary as its North and Central American headquarters. CNOOC also plans to list on the Toronto Stock Exchange," writes Cannacord Genuity's Skolnick in a Monday note to clients.

A logical counter bidder would be Total, according to the analyst, however, "We don't expect Total, or really anyone else, to try to compete with China," the analyst wrote.