The national oil companies of Russia, China and India are all running the slide rule over a 5 billion euro stake that has been put up for auction in Repsol, the Spanish oil giant.

PetroChina, China National Offshore Oil Company, Russia’s big three of Gazprom, Lukoil and Rosneft, and India’s ONGC are among a throng of bidders examining an offer. European majors also known to be taking a look include Royal Dutch Shell, Total of France and Italy’s Eni. Expressions of interest are due to Dresdner Kleinwort, the bank running the auction, in ten days.

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. Press reports in Spain indicate that La Caixa, Spain’s largest savings and loan, could offload some of its 15% stake. If a buyer were able to buy both holdings it would result in a stake greater than 29.9%, the threshold beyond which a full takeover bid would be required under Spanish law.

Rivals have longed eyed Repsol as a break-up candidate but have not acted. 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, sources said.

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.

Merger activity is heating up in the North Sea as well. Peter Barker-Homek, chief executive of Taqa, Abu Dhabi’s state-owned oil group, said he is holding talks with four North Sea companies over the purchase of assets or entire companies. As credit conditions have worsened, companies reliant on debt to fund their activities have become desperate. Their only alternative, the equity market, remains firmly shut. “Approaches [from companies looking to be bought] have increased exponentially over the last three weeks,” said Barker-Homek. After a pair of recent fundraisings, he said he has more than $4 billion to spend on acqusitions. He predicted that a quarter of the exploration and production companies listed on AIM would either be bought or go out of business within the next 12 months.