China National Petroleum Corp (CNPC)., 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 (NDRC), 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.