MercoPress. South Atlantic News Agency

YPF nationalization allegedly killed Repsol’s Chinese option to leave Argentina

Chinese financial website says Sinopec was prepared to pay Repsol 15 billion for YPF

China's state-owned Petrochemical Corp (Sinopec) spokesman Huang Wensheng came on stage to play down rumours indicating that Argentina's move to nationalize local oil company YPF, controlled by Spain's Repsol, has spoiled years of planning by Sinopec to buy the energy giant.
“We don't comment on market rumours,” Wensheng said.

The company's representative declaration came after bankers said China's second-largest oil company had held talks with Repsol to buy its controlling 57% stake in YPF. Moreover, Chinese website Caixin.com cited a source as saying Sinopec had reached a non-binding agreement to take over YPF for more than 15 billion dollars.

But plans by Argentine President Cristina Fernández to seize control of YPF, which have incensed Spain and sparked international criticism, have killed any hopes that state-owned China Petrochemical Corp (Sinopec) could seal a deal, the bankers cited had allegedly said.

The Caixin.com report said Sinopec was in talks with Repsol to buy YPF despite the nationalization threat, as well that bankers said Sinopec's interest in YPF went back at least five years.

Caixin.com's report said Sinopec believed YPF oil blocks in Argentina hold large development potential and it was confident it could meet the Argentine government's requirements to accelerate development and production.

Repsol Chairman Antonio Brufau declined to comment on the Sinopec interest in YPF but at a news conference on Tuesday said the company had received lots of international interest in YPF.

Sinopec Group spent 7.1 billion dollars to buy 40% of Repsol's deepwater oil assets in Brazil in 2010. In November last year, Sinopec agreed to pay 3.54 billion dollars to Portuguese oil firm Galp Energia for a 30% stake in its deep-sea oil assets in Brazil.

Sinopec Group, parent of Asia's largest refiner Sinopec Corp, has launched at least 74 acquisition deals worth 48.1 billion dollars since 2005, as part of China's attempts to secure resources to feed the country's rapid growth.

The group which bought Occidental Petroleum Corp's Argentine assets for 2.5 billion dollars last year, wants to more than double its equity oil output from overseas projects to over 1 million bpd by 2015 from 2011.