The clash between the Argentinean government and Repsol over its YPF unit is threatening to escalate into a diplomatic row of the first order after Industry and Energy Minister José Manuel Soria warned of the “consequences” of its “hostility” toward the leading Spanish oil firm.
Soria’s warning shot to President Cristina Fernández de Kirchner came after Argentinean authorities had withdrawn YPF’s license to operate in another three areas bringing the total to five. Five other provinces have also shut YPF down in some of the districts under their control. Soria recently traveled to Argentina in an attempt to mediate in the dispute, while King Juan Carlos also called Fernández to find a solution to the problem. Argentina wants Repsol to invest more to boost production and has made thinly veiled threats to nationalize YPF.
Shortly after Soria’s warning, Fernández decided not to attend a meeting between her central government and