Expatica news

Repsol warns rivals against investing in seized unit YPF

Repsol warned on Tuesday that it would take legal action against companies which invest in YPF after Argentina seized control of the Spanish oil major’s subsidiary last week.

The company has sent letters to its competitors to inform them of its plans, a Repsol spokesman said, confirming a report in the Financial Times.

“The idea is to protect the assets that were confiscated in Argentina until the situation is resolved in a satisfactory way for the parties that are involved,” the spokesman said.

“What we are doing here is asking for the understanding of the other sector players vis-a-vis this situation, so that they do not take part in a confiscation,” he added.

Exxon Mobil, Chevron and ConocoPhillips are among the firms which have been approached by Repsol, according to a source close to the dossier. The Repsol spokesman would not confirm the name of the companies that were contacted.

Argentine President Cristina Kirchner on Friday signed a bill expropriating 51 percent of YPF’s stock from Repsol, its majority shareholder, sealing a measure that has roiled the country’s trade ties with Europe.

Kirchner has argued that the move was justified because Argentina faces sharp rises in its bill for imported oil, and Repsol has failed to make agreed investments needed to expand domestic production.

Spain, the European Union and international organisations have criticised the measure, warning that it puts Argentina’s overall trade and investment relations in jeopardy.

YPF is Argentina’s biggest oil company. It 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.

Repsol said it will seek at least $10 billion 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.