The instant reaction in the oil industry to reports that China National Petroleum Corp was in talks to buy the majority of YPF of Argentina from its Spanish parent Repsol YPF was that the Spaniards would be delighted, and the Chinese in danger of being fleeced.

As the English like to say to someone who has been on the wrong end of a deal: "They must have seen you coming."

For western oil companies, however, such a dismissive response would be complacent. CNPC's interest in YPF shows how the Chinese companies see the world differently from their US and European rivals. That difference of approach is likely to make them increasingly potent competitors.

Only last month, the largest foreign takeover by a Chinese company was announced, with Sinopec's $7.2bn agreed bid for Addax Petroleum, an oil company active in west Africa and Iraqi Kurdistan. If the YPF deal goes ahead, it is likely to be even larger.

It is true that the Argentine business is not the world's most enticing asset. Its profitability is limited by domestic price regulation and a crippling export tax. Labour disputes and an increase in fixed costs also make investors wary of Argentina's oil and gas sector.

Repsol has been trying to cut its stake for years. Last year it sold 15 per cent to Enrique Eskenazi, an Argentine businessman, but was forced in November to abandon the planned float of a further 20 per cent.

Seen from CNPC's point of view, however, YPF is an important oil and gas producer in Argentina, which is one of the biggest economies in South America, a region where Chinese companies are already active. YPF produces about a third of Argentina's oil and a quarter of its gas.

Neil Beveridge of Sanford Bernstein, the investment company, says Chinese companies are looking to buy resource assets, in particular oil, for two reasons.

One is energy security: China's demand for oil will grow faster than its output, so it needs to secure new supplies somewhere and having Chinese companies controlling production is the most reliable way to do that.

The other is the ambition of the companies themselves: they want to grow, and build global businesses, and for that they need to make acquisitions. Thanks to China's financial strength, they have the funds to do so.

Fraser McKay of Wood Mackenzie, the consultancy, says the Chinese groups also have different objectives to western companies, and evaluate deals according to different criteria.

"They are reporting to different people," he says. "Western companies are reporting to investors who would generally rather they strengthened their liquidity and did not do anything too risky. The Chinese companies are answering to politicians who have an aggressive strategy of resource capture."

The Chinese companies do not have everything in their favour: in some countries they face barriers to takeovers. It would be hard for them to make an oil or gas acquisition in Australia, and in the US they have been warned off by the furore stirred up by CNOOC's $18.5bn bid for Unocal in 2005.

As a result, they are being pushed towards central Asia, Africa and South America, and have generally avoided coming into direct competition with the big western oil groups.

But in the future Chinese and western companies may well start going head to head.

An important test case will be the imminently expected deal for Kosmos, a small exploration company with a stake in the Jubilee field off the coast of Ghana, which holds an estimated 1.2bn barrels of oil. Companies reported to have taken a look in Kosmos's data room include Exxon, Chevron and Royal Dutch Shell.

Unlike YPF or Addax, Jubilee is an attractive asset that any big western group would be delighted to own. If they are outbid by the Chinese - CNOOC has indicated it is likely to put in an offer - that will show the industry really has entered a new era of competition.