Spain warns Argentina not to nationalise Repsol's Argentinean YPF unit

Spain yesterday warned Argentina that it would retaliate if it goes ahead with plans to take back control of Repsol's majority stake in its Argentinean YPF unit.

Spanish secretary of state for European affairs, warned in a radio interview that Argentina risks becoming "an international pariah" if it wrests Repsol's 57 per cent stake in YPF.

Spain's foreign minister José Manuel Garcia-Margallo has urged the European Commission, the US and other Latin American governments to support Spain in its efforts to prevent the nationalisation of YPF.

Buenos Aires-based YPF produces about a third of the country's oil and a quarter of its gas. It has 26 onshore and offshore exploration blocks and 91 production areas.

Repsol acquired 97.81 per cent of YPF in 1999 and has since sold stakes to Grupo Petersen, Lazard Assets Management and through private placements and share offerings. It currently owns 57 per cent in YPF worth nearly $7 billion.
YPF represents 42 per cent of Repsol's total reserves, and accounted for about 35 per cent of Repsol's revenue and more than 60 per cent of its oil production until last year.

Since weeks, speculation has been rife that the Argentinean government could buy a stake in YPF or even nationalise it.
The Argentinean government has been criticising Repsol for not investing enough in Argentina and instead paying too much of its profits in dividends. It withdrew 15 oil leases, representing 18 per cent of YPF's crude production, for failing to develop them.

Its recent proposal to invest a record $3.4 billion in YPF was rejected by the Argentinean government as too low.
European Union spokesman, Olivier Bailly told reporters that the EU hopes Argentina shows respect for "international engagements on the treatment and the protection of international investments on its territory."

But Repsol yesterday said that it has not received any official notice from Argentina on the government's plans to take control of YPF, and told Spanish security regulators that "it has not received any notification from the (Argentine) authorities related to its stake in its subsidiary YPF SA."