UPDATE 1-CNOOC in talks to join CNPC in YPF bid -source

* In talks to join in $14.5 bln bid for Repsol's YPF-source

* Potential joint bid would see CNOOC get 25 pct of YPF (Adds details, background, analyst quote)

By Joseph Chaney

HONG KONG, July 10 (Reuters) - China's top offshore oil and gas producer CNOOC (0883.HK) is in discussions to support China National Petroleum Corp's (CNPC) expected $14.5 billion bid for Spanish oil major Repsol's (REP.MC) Argentine unit YPF, a source with direct knowledge of the matter said.

CNPC, parent company of top Asian oil and gas company PetroChina (0857.HK) (PTR.N) (601857.SS), is in talks to buy 75 percent of YPF, sources said earlier this week.

CNOOC (CEO.N) is now in discussions to launch a joint bid with CNPC and is eyeing 25 percent of YPF, a source told Reuters on Friday.

The source was not authorised to speak publicly about the matter and declined to be identified.

"All the parties involved are in discussion for a joint bid," the source said, adding that the process is at an early stage.

A CNOOC spokesman was not immediately available for comment.

Chinese state oil companies have been tasked with securing energy supplies to fuel a fast-growing economy, and if the Repsol deal went ahead it will mark the latest in a string of foreign takeovers, including a $7.2 billion bid for Swiss oil explorer Addax Petroleum (AXC.TO) by Sinopec Group.

CNOOC is being represented by JPMorgan (JPM.N), while Morgan Stanley (MS.N) is representing CNPC and Goldman Sachs (GS.N) is advising YPF on the sale, sources previously told Reuters.

India's Oil and Natural Gas Corporation (ONGC.BO) and Russian companies are also eyeing YPF, although a timetable for formal bids remains unclear.

LINKING UP

YPF has more than 30,000 employees, controls over half of Argentina's refining capacity and nearly 40 percent of the country's oil output. It holds mineral rights to 21 exploration blocks and 92 production blocks in Argentina, according to the company. As of end-2008, YPF owned 1,678 service stations.

CNPC -- which in 2007 failed twice to buy all of YPF's Latin American assets amid wrangling over terms -- had yet to put a bid on paper, sources said earlier this week.

China's National Development and Reform Commission (NDRC) has historically decided which company can proceed with deals involving multiple domestic bidders, as China does not want state-backed companies bidding up the price of a deal.