India vs China yet again, this time in the Pampas

ONGC Videsh Ltd (OVL), the international arm of state-owned Oil & Natural Gas Corporation (ONGC), is looking to buy a stake in YPF, the Argentinian arm of Spanish oil major Repsol YPF SA.

But the road ahead is expected to be tough for OVL as this time around, it has to compete with not one but two Chinese rivals.

An OVL spokesperson said the company is interested in a number of assets overseas and cannot confirm anything till a deal is finalised.

According to international media reports, state-owned Chinese oil company China National Petroleum Corporation (CNPC) and rival China National Offshore Oil Corporation (CNOOC) have also been aggressively seeking equity participation in YPF. While CNPC is aiming for a 75% or higher stake and has offered $14.5 billion for it, CNOOC wants to pick up a minority stake of 25%. ONGC and a Russian company are reported to be others in the fray.

OVL’s attempts to buy international oil and gas assets have been thwarted repeatedly by Chinese oil majors. The one big exception was the London Stock Exchange-listed Imperial Energy, which the ONGC arm succeeded in acquiring in September last year. OVL beat China Petroleum and Chemical Corporation (Sinopec) to Imperial, buying the UK-based firm for $2.5 billion.

However, in most other cases, OVL has been outbid by its Chinese rivals. Among the deals it lost are Omimex de Colombia, a Colombian asset bought by Sinopec in September 2006; the Apko oilfield off Nigeria that CNOOC took over in January 2006; and PetroKazakhstan and Ecuador, which a Chinese firm acquired in 2005.