27 November 2008

MADRID – Spain's prime minister vowed on Wednesday to defend oil major Repsol so that is remains "Spanish" and "independent" amid moves by Russian energy giant Lukoil to become the biggest shareholder.

But he also reaffirmed that the government would not intervene directly to prevent any sale to Lukoil of a stake in Spain's largest energy group.

"The government will defend Repsol and its shareholders so that they remain Spanish, with a Spanish management, autonomous and independent, but also with respect to the free market," Prime Minister Jose Luis Rodriguez Zapatero told parliament.

He was responding to criticism by conservative opposition leader Mariano Rajoy, who called on him to intervene to prevent Lukoil, "a dubious company linked to the (Russian) government which uses energy as a weapon," from buying a stake in Repsol.

"Repsol is not a hotel chain, it is a group with high strategic value," Rajoy said.

Zapatero said Rajoy was "asking for intervention that I cannot do. We will see how we can support (Repsol and its major shareholders), but we will not intervene."

Lukoil is seeking to buy 29.9 percent of Repsol in a EUR-10-billion deal, according to Spanish media.

The privately owned Russian oil giant is in talks to buy the 20 percent stake in Repsol that heavily indebted Spanish construction group Sacyr Vallehermoso is interested in selling.

Spanish bank La Caixa said last week it was also negotiating with Lukoil over the sale of part of its 14.2 percent stake in Repsol.

But the proposed deal has sparked concern in Spain that a Russian company would hold the largest stake in the country's leading oil group.

On Tuesday, Zapatero also ruled out any sort of "public intervention" in the possible sale.

[AFP / Expatica]