China Petrochemical Corp., known as Sinopec, has spoken to bankers in Beijing and Hong Kong about a possible bid for a stake in Spanish oil company Repsol YPF SA (REP), two people familiar with the situation said Friday.

"Sinopec is looking to buy a stake in Repsol, but has yet to appoint an advising bank," one of the people said.

A Sinopec official, who declined to be named, said contact had been made with bankers and more information could be made public soon, but declined to elaborate.

A Repsol official declined to comment, while calls to Sinopec's general office were unanswered.

Spanish newspaper Cinco Dias reported Jan. 14 that Sinopec is negotiating to buy the 20% stake in Repsol held by Spanish builder Sacyr Vallehermoso SA (SYV.MC).

The report said Sacyr was in talks with the Chinese company after negotiations with Russia's OAO Lukoil (LKOH.RS) over a sale seemed to have stalled.

The report also said Sacyr has asked Sinopec for EUR26.7 per Repsol share, the same price the construction company paid when it bought the shares, and the same price it had sought from Lukoil.

Sacyr in 2006 paid EUR6.53 billion for its 20% stake in Repsol. Yet, based on Repsol's market capitalization of EUR16.6 billion Friday, the current market value of Sacyr's 20% stake would only be EUR3.3 billion.

Repsol shares fell 1.3% to EUR13.64 in Madrid at 1254 GMT Friday.

A Sacyr spokesman declined to comment, reiterating previous statements that the company is studying a potential sale of its Repsol stake.

State-owned Sinopec is the parent company of China Petroleum & Chemical Corp. (SNP), or Sinopec Corp., which is listed in Hong Kong and Shanghai.

Spanish savings bank La Caixa, which holds a 14.1% indirect stake in Repsol and was previously also looking to sell all or some of its stake, said in a filing to the Spanish market regulator late December that it is no longer in such talks.

Lukoil sought to strike a joint deal with Sacyr and La Caixa to buy a total stake of 29.9%.

But the potential deal ran into financing difficulties and also met with opposition from Spain's government. Finance Minister Pedro Solbes said in November he would prefer shareholders in Repsol and other Spanish companies that came from economies similar to Spain's and open to foreign investment.

Earlier that month, Solbes had cautioned against a possible purchase of a Repsol stake by Russian-government controlled OAO Gazprom (GAZP.RS). Solbes argued Repsol shouldn't end up in the hands of a foreign state-owned company, after the Spanish oil firm was privatized in the 1990s.

Asked to comment on a possible purchase of Sacyr's stake by Sinopec, Spanish Industry Minister Miguel Sebastian said earlier this week that the government hadn't heard of any planned deal related to Repsol.

Repsol has close to 1.2 million barrels a day refining capacity in Spain and Latin America. The firm also has stakes in ultradeep offshore blocks in Brazil's Santos Basin, where potentially gigantic discoveries have been made recently.

-Nisha Gopalan and Jing Yang, Dow Jones Newswires; 852-2832-2343; nisha.gopalan@dowjones.com; (8621) 6120 1200

(Bernd Radowitz and Santiago Perez in Madrid contributed to this article.)

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