-- Alexander Smith is a Reuters columnist. The opinions expressed are his own --
By Alexander Smith
LONDON, July 3 (Reuters) - Antonio Brufau's luck is looking up. It seems as though China's thirst for oil could finally rescue the Repsol chief from the Spanish oil company's painful foray into Argentina.
China National Offshore Oil Corp Ltd (CNOOC) and state-run China National Petroleum Corp (CNPC) are apparently falling over themselves to be the Chinese group sanctioned by Beijing to go ahead and make a bid for Repsol's YPF unit. But things are never that simple in corporate China and another report says the two will split YPF, with CNPC taking 75 percent and CNOOC buying the remaining 25 percent.
Despite all the noise, Brufau could be excused for feeling a little nervous. For a start, CNPC has been here before, having failed twice in 2007 to buy all of YPF's Latin American assets.
But if only one Chinese bidder emerges -- Beijing does not normally want its oil companies bidding against each other -- Repsol is right to play up the idea of a wider auction. After failing to sell a stake in YPF and postponing plan to list its Argentine unit last November, it now says it has "received proposals of a different nature and from different companies, without any of them being firm".
With a price tag of up to $22.5 billion for the whole of YPF doing the rounds, a sale would be a coup for Repsol -- relieving it of the long-standing headache it acquired in 1999 when it bought Argentina's biggest company for around $15 billion.
But so far Repsol has been reluctant to give up control of YPF -- despite the price controls, imposed contract changes and asset seizures that it and other oil majors have faced in Latin America. Understandably, the Argentine government has wanted to keep it largely in local hands, so until now the talk has always been of Repsol offloading a 25 percent stake rather than its entire holding in the company.
With more than 30,000 people working for YPF, ownership is a sensitive subject in Argentina. So even last week, Brufau was insisting that Repsol was not talking to either local Argentine or Chinese investors. However, things now appear to be moving fairly fast.
This would fit with Beijing's apparent desire to move quickly. China is not wasting any time in scooping up oil assets and if one (or more) of its oil companies were to strike a deal with Repsol it would mark the latest foreign takeover by China's oil majors following the recent $7.2 billion bid for oil explorer Addax Petroleum by Sinopec Group.
The big question for Brufau is whether political opposition in Argentina to a Chinese acquisition of YPF would scupper a deal. Selling a mere 25 percent stake in YPF, as Repsol has previously wanted to, won't do much for China's seemingly insatiable appetite for oil assets.
While Beijing has its cheque book open, both Brufau and the authorities in Buenos Aires will have to think hard before saying no to a Chinese offer for a controlling stake.
-- At the time of publication Alexander Smith did not own any direct investments in securities mentioned in this article. He may be an owner indirectly as an investor in a fund. For previous columns, Reuters' customers can click on -- (Editing by David Evans)