Repsol has initial deal with Argentina on YPF

Repsol has initial deal with Argentina on YPF

Repsol and Argentina reached a preliminary deal on Monday for the Spanish oil major to get paid for the 51 percent stake in the South American’s country’s main energy company YPF that the Argentine government seized in 2012. If the deal is approved by Repsol at a board meeting scheduled for Wednesday in Madrid, it could spark a wave of international investment in Argentina’s vast Vaca Muerta shale oil and gas formation.

Spain’s government was proposing Repsol receive $5 billion in compensation and that both Repsol and YPF each name investment banks to advise on the valuation of the stake seized, said one source.

Argentina seized Repsol’s majority stake in the Buenos Aires-based energy firm YPF last year, arguing the Spanish company had not invested enough. The move shocked Argentina’s European trade partners and put off much-needed energy investment.

After the 2012 expropriation of YPF, Repsol lodged a complaint with the World Bank arbitration tribunal, the International Centre for Settlement of Investment Disputes and has threatened to sue any company that partners with YPF.

A Repsol release states ‘In relation to the press release jointly issued by representatives of the Governments of Argentina, Mexico and Spain, Repsol will submit the outlined heads of agreement to the consideration of its Board of Directors, which will evaluate the terms and conditions.

To this end, the Board of Directors of Repsol, at its meeting to be held on Wednesday 27 November, will analyze and resolve as it deems appropriate in the sole interest of the company and its shareholders.An official notice will be published at the end of the Board meeting’.

Oil and Gas Press