EU 'respects' Argentina's Repsol decision: envoy
18th May 2012, 0 comments
The European Union respects Argentina's decision to seize control of Repsol subsidiary YPF but expects the South American country to compensate the Spanish oil giant, an EU official said in an interview published Friday.
Earlier this month, Argentine President Cristina Kirchner signed a bill expropriating 51 percent of YPF's stock from Repsol, its majority shareholder, arguing Repsol had failed to make agreed investments needed to expand domestic production.
The move led Repsol to file a class action lawsuit against Argentina in a New York court. The 27-nation EU also announced action.
"Since a law has been adopted by the (Argentine) Congress, the EU respects this decision and reaffirms that it never called into question Argentina's right to expropriate in line with the constitution and international agreements," Alfonzo Diez Torres, the EU's ambassador to Argentina, told the financial daily El Cronista.
The EU "only expressed its concern about the procedure followed, the form it took," the newspaper quoted him as saying.
Diez Torres, a Spanish citizen, went on to say that Brussels trusts in the authorities in Buenos Aires and expects that "Argentina will complete this process of expropriation in line with the constitution and treaties which first and foremost amounts to awarding a financial compensation to company in question."
On May 7, Karel de Gucht, the EU's trade chief, said the bloc was days from taking action against Argentina's government.
Diez Torres followed up on those remarks in the interview, saying any measures it would consider taking would respect both European and international law.
Repsol has said it will seek at least $10 billion (7.9 billion euros) in compensation for its expropriated shares, as well as international arbitration to settle the claim.
Argentina counters that Repsol is leaving a $9 billion debt, while in just over a decade it earned more than $15.7 billion, most of it sent overseas and not reinvested.
YPF accounts for 34 percent of Argentina's domestic oil production, 25 percent of domestic gas production and 54 percent of domestic refining, according to the Argentine Oil Institute.
© 2012 AFP