MercoPress. South Atlantic News Agency

Repsol in the process of selling YPF to China, says Beijing press

“China Daily” insists talks have begun and CNPC has offered 14.5 billion USD

Chinese media based on reliable sources from the country’s giant oil corporation CNPC (China National Petroleum Corporation) report the almost certain sale by Spain’s Repsol of 75% of its subsidiary YPF, an operation involving 14.5 billion US dollars

“Spain’s Repsol could sell YPF to CNPC”, published Wednesday in its front page the “China Daily”, a publication closely linked to government and the business community.

CNPC, the country’s largest energy corporation apparently has already begun talks but “China Daily” quoting undisclosed resources said that the new offering must still be agreed and formally presented.

CNPC in 2007 tried on two occasions to take full control of Respsol/YPF.

The Chinese newspaper also revealed that China National Offshore Oil Corporation, CNOOC, the country’s third ranked, is also interested in the purchase as well as companies from Russia, and India.

But CEO Fu Chengyu from CHOOC recently stated that the corporation was not interested in the purchase because the company’s policy is geared towards “cooperation”.

Last week Repsol, which according to the Chinese press needs to sell assets and ensure hydrocarbon reserves admitted to the Spanish Securities and Exchange commission it had received “different” proposals from different corporations interested in joining its Argentine affiliate YPF, but also warned that none of those companies has made any formal proposal.

“China Daily” said Repsol was asking between 15 and 17 billion US dollars for its YPF assets

CNOOC apparently is targeting the remaining 25% in a joint operation with CNPC, although the complicated operation has yet to be confirmed.

Repsol/YPF main offices in Madrid on Tuesday said that no formal or strong bid for the Argentine YPF affiliate had been received.

Company sources also pointed out that if that was the case, talks would be first held with the Argentine Petersen group belonging to Enrique Eskenazi and the Argentine government that holds the golden share.

Repsol still owns 85% of YPF, following the acquisition by the Petersen group, on February 2008, of 15.46% of the company’s equity, plus an option for a further 10%.