Chinese NOC eyes US$14.5bn Repsol acquisition

CNPC in talks to buy a 75% stake in YPF, a Repsol subsidiary

China National Offshore Oil Company, China National Petroleum Corporation, CNPC, Latin America oil and gas, Oil and Natural Gas Corporation, Oil companies South America, Repsol, Repsol-YPF, NEWS, Industry Trends

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China National Petroleum Corporation (CNPC) is believed to be on the verge of making a US$14.5 billion offer for the Argentinean interests of Repsol.

A source is quoted by Reuters as saying CNPC are in talks with the Spanish supermajor about taking major share in YPF. This will be the CNPC’s second bite of the YPF cherry as they also made an unsuccessful bid buy the company outright back in 2007.

YPF has a number of enviable assets in South America and is being eyed up by a number of other companies including the China National Offshore Oil Company (CNOOC) and India’s Oil and Natural Gas Corporation (IONGC).

The move underlines Asian oil companies intent on expanding their asset base across the globe. However, the deal is still far from complete as many analysts believe that CNPC will have to significantly increase its offer to a figure of around US$15-17 billion for the deal to make commercial sense to Repsol.

Tom Grieder, energy analyst for HIS Global Insight believes that if CNPC offer the right sort of money, they could make an attractive proposition to Repsol.

“By virtue of its high capital reserves, strong state backing, and technical expertise in enhanced oil recovery (EOR) CNPC is likely to be an attractive bidder,” Grieder said.
 
”Acquiring YPF would give CNPC and CNOOC immediate access to significant quantities of crude oil given that 92 out of the company's 113 Argentine blocks are producing, which could help diversify imports away from the Middle East and help consolidate China's long-term oil supply security,” he added.

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