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Oil & Gas

Chinese firms offer $17 billion for Repsol''s YPF stake

August 10, 2009
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The Wall Street Journal reports that China National Petroleum Corp. and Cnooc Ltd. have proposed paying at least $17 billion for Repsol YPF SA''s stake in its Argentine unit YPF SA, two people close to the talks said. The deal, which could be the biggest overseas investment by China, highlights its growing thirst for energy resources globally and its willingness to offer big money for them, and underlines the ambition of CNPC to build up its presence in South America and elsewhere. The Chinese side discussed their offer with Repsol executives in a two-and-a-half-hour evening meeting on July 30 in Europe, according to a document seen by Dow Jones Newswires. A Repsol press official denied the company had met on July 30 with CNPC and Cnooc, but said the company had no further comment. Repsol has several times postponed a public offering of a 20% stake in YPF due to adverse market conditions -- an indication that the Spanish oil firm doesn''t plan to divest any stake in YPF on the cheap. Also, there is Argentine government concern that the stake sale would give China control of domestic pump prices and other upstream resources. Industry experts have said China would likely meet significant opposition from the Argentine government, which wants to exert more control over strategic natural resources and has had an eye on YPF for some time. There are plenty of ways it could block a transaction, including the golden share it has in YPF.
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