Nov. 21 (Bloomberg) -- Repsol YPF SA surged in Madrid trading after Criteria Caixacorp. SA said it's ``in negotiations'' over the possible sale of its stake in Spain's biggest oil company to OAO Lukoil.

Repsol rose as much as 8.8 percent after earlier being suspended from trading. Criteria, a Barcelona-based investment company, has held talks with ``various potential investors'' about selling its holding in ``parallel'' with Repsol shareholder Sacyr Vallehermoso SA, according to a regulatory filing today.

El Economista said Lukoil has offered Criteria and other shareholders 28 euros a share for a stake of just under 30 percent in Repsol. An offer at this price would value the combined stake at about 10.2 billion euros ($12.8 billion).

``Lukoil would have trouble financing the deal,'' Evgenia Dyshlyuk, an oil analyst at Renaissance Capital, said. ``They don't have much cash because they need to spend it on capital spending.''

Lukoil, Russia's biggest non-state oil producer, already owns refineries in Bulgaria and Romania and plans to set up an Italian refining venture with ERG SpA next month. Although Spain's Prime Minister Jose Luis Zapatero said yesterday that he would prefer for Repsol to remain under a ``Spanish flag,'' he also said the possible stake sale was a matter for ``private companies.''

Repsol climbed 1.20 euros to 14.80 euros as of 10:57 a.m. local time. The shares are down 39 percent this year.

Sacyr's Stake

Sacyr jumped as much as 21 percent. The nation's fifth- biggest builder said last week it was in talks on the possible sale of its 20 percent interest in Repsol. Lukoil dropped 2.3 percent in Moscow.

Criteria has a 9.1 percent direct stake in Repsol as well as a smaller indirect interest through Repinves taking its total stake to 12.7 percent, according to the company's third-quarter earnings report.

Lukoil spokesman Dmitry Dolgov declined to comment on Repsol's suspension. Juan Maria Hernandez, a spokesman for Criteria, wasn't available for comment. Repsol spokesman Kristian Rix declined to comment when reached by telephone. A Sacyr spokeswoman, who didn't want to be identified in line with official policy, said the company was open to talks about selling any of its subsidiaries.

Refinery Operations

Repsol operates five refineries in Spain, three in Argentina and one in Peru. It has holdings in another refinery in Argentina and two in Brazil, giving the company a total refining capacity of 1.23 million barrels a day, according to the Madrid-based company's Web site.

Sacyr was up 17 percent at 8.58 euros, cutting its loss for the year to 66 percent. Lukoil traded down 2.3 percent at 797.99 rubles on the Micex stock exchange.

Sacyr, which has a market value of 2.6 billion euros, ended September with debt of 16.5 billion euros. The construction company spent 6.5 billion euros buying the Repsol holding in 2006, paying an average of 26.71 euros a share. Sacyr earns about 5 billion euros a year from Repsol dividends, according to Steven Fernandez, a Paris-based industrial analyst at Exane BNP Paribas.

Lukoil has $1.9 billion in debt and loans due at the end of 2008. Obligations will drop to $609 million in 2009 and then to $525 million the year after that. The company had $1.66 billion in cash at the end of June.

`Well-Structured'

``We don't have much debt and it's well-structured, long- term credit that allows us to look with certainty at our projects for 2009,'' Chief Executive Officer Vagit Alekperov told Bloomberg Television last month in an interview.

In June, Lukoil agreed to pay ERG 1.35 billion euros for 49 percent in a new venture that will control the 320,000 barrel-a- day Isab refinery, storage tanks, and a 99-megawatt power plant in Priolo, Sicily. It also has refineries in Bulgaria and Romania.

OAO Gazprom, Russia's natural-gas exporter, said Nov. 14 that it's not interested in the Repsol stake.

To contact the reporter on this story: Gianluca Baratti in Madrid gbaratti@bloomberg.net.

Last Updated: November 21, 2008 04:59 EST