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20% stake of Spanish Repsol Put Up for Auction

Russia, China and India are main candidates for making deal

Repsol, the Spanish oil giant, has put up for auction a 5 billion euro stake.

PetroChina, China National Offshore Oil Company, Russia’s big three of Gazprom, Lukoil and Rosneft, and India’s ONGC are among those who seriously consider an offer.

The 20% stake has been put on the block by Sacyr Vallehermoso, one of Spain’s largest property companies which has been hit hard by the bursting of the Spanish property bubble and a debt load of more than 18 billion euros.The sale could lead to a break up of the 26 billion euro company.

The company is Spain’s largest oil company and its ownership is highly political. The country’s rapidly plummeting economy and the indebtedness of many of its large conglomerates could make the government less precious about Repsol’s ownership, experts say.

Even so, industry sources said the stake is likely to go to an emerging market player rather than one of the established majors. For potential bidders, the attraction would be striking a partnership with a group that is strong in the surging business for liquefied natural gas and with one of the highest exposures to Brazil, where several major discoveries have been made in the deepwater off its coast in recent months.

Author: Ksenia Kochneva