July 3 (Bloomberg) -- China National Petroleum Corp., the country’s biggest oil producer, is among companies that are in talks to buy Repsol YPF SA’s $12 billion Argentine operations, a Chinese government official said.

China National Petroleum is holding discussions with Repsol, said Zhang Guobao, the vice chairman of the National Development and Reform Commission, China’s top planning agency.

A purchase would add to the $5.4 billion China has spent on oil assets in Singapore, Syria and Kazakhstan since December and take its hunt for energy resources to South America. Repsol Chief Executive Officer Antonio Brufau wants to cut the company’s stake in YPF after Argentine restrictions on natural gas exports and price caps on crude reduced profitability.

“This is a good time for Chinese companies to buy and we’ve seen talks in various countries in recent months,” said Wang Aochoa, an energy analyst at UOB-Kay Hian in Shanghai. “Chinese energy companies are in a sound financial position to buy and they have strong support from the Chinese government to look for oil resources,” he said.

The government will offer preferential lending rates for overseas oil investments and may tap the country’s $1.95 trillion foreign-exchange reserves to help companies buy fields abroad, China National Petroleum said in a statement on its Web site on Feb. 16, citing the nation’s three-year energy plan.

China’s foreign exchange reserves are the world’s largest.

Repsol Gets Approaches

Liu Weijiang, China National Petroleum’s Beijing-based spokesman, didn’t answer calls to his office and mobile phone. Repsol has no immediate comment, spokesman Kristian Rix said by telephone.

Repsol, Spain’s biggest oil producer, said on July 2 it has been approached by companies interested in its Argentine YPF unit. None of the proposals is “firm,” Madrid-based Repsol said in a regulatory filing, without identifying the companies or the size of a potential sale.

Chinese companies that are acquiring assets or bidding for projects overseas must report information to the National Development and Reform Commission and the State Council, the NDRC said in a statement on its Web site on June 19.

China National Petroleum is interested in taking control of YPF, the South China Morning Post reported on July 2, citing people it didn’t identify. CNPC, as China’s biggest producer is known, may offer to buy as much as 75 percent of YPF, while rival Cnooc Ltd. is interested in a 25 percent stake, according to the newspaper.

Another Chinese oil company, China Petrochemical Corp., or Sinopec Group, last month announced plans to purchase Addax Petroleum Corp. to gain reserves in Iraq’s Kurdistan and in West Africa.

China National Petroleum is the parent of Hong Kong-listed PetroChina Co.

Last Updated: July 3, 2009 07:01 EDT