HONG KONG, July 3 (Reuters) - China National Offshore Oil Corp Ltd (CNOOC) and state-run China National Petroleum Corp (CNPC) are battling for approval to bid for the Argentinian unit of Spanish oil major Repsol (REP.MC), sources said on Friday, in a deal that could be worth around $17 billion.
A deal would mark the latest in a recent string of foreign takeovers by China's oil majors, including Sinopec Group's (0386.HK) $7.2 billion bid for Swiss oil explorer Addax Petroleum AXC.TO. [ID:nBNG477261]
Chinese state oil firms have been tasked with securing energy supplies to fuel the country's fast-growing economy. They have been prepared to pay prices for assets which Western oil companies are unwilling to match, and to invest in locations where political risks deter their Western peers.
While the auction for the Repsol business is in its early stages, the National Development and Reform Commission (NDRC), China's top economic planning body, is involved in the process, according to sources close to the matter.
The NDRC has historically decided which Chinese company can ultimately proceed with an offer on deals involving multiple domestic bidders. The Chinese government does not want state-backed companies bidding up the price of a deal.
In the meantime, CNPC, parent of Asia's top oil and gas producer PetroChina (0857.HK) (601857.SS) (PTR.N), and CNOOC, the country's main offshore producer, are working with advisers to explore a possible deal for the Argentinian business, known as YPF.
Discussions with the Spanish company were at a very preliminary stage, added the sources, who were not authorised to speak publicly about the process.
A spokesman for CNOOC (0883.HK) declined to comment, and a spokesman for PetroChina was not immediately available.
Repsol said on Thursday it had received several offers for a stake in YPF after the South China Morning Post reported the Chinese state oil companies were mulling bids valuing YPF at around $17 billion. [ID:nL2565269]
"Repsol has received proposals of a different nature and from different companies, without any of them being firm," the Spanish company said in a statement.
Repsol has been looking to sell a stake in its Argentine unit for some time and has been considering a public share offer.
While the NDRC decides, competition among China's state firms to win approval to bid is intense, the sources said.
They said CNOOC was being represented by JPMorgan (JPM.N), while Morgan Stanley (MS.N) is representing CNPC. Goldman Sachs (GS.N) is advising YPF on the sale. JPMorgan and Goldman declined to comment. Morgan Stanley did not return a call seeking comment.
CNPC failed twice in 2007 to buy all of YPF's Latin American assets. (Reporting by Michael Flaherty, Lincoln Feast and Alison Lui; Editing by Ian Geoghegan)