Spanish Foreign Minister José Manuel García-Margallo called on Argentina to return to the negotiating table to hammer out a compensation deal for the “millions of small Spanish shareholders” of Repsol, whose YPF unit was expropriated last week.
Repsol is claiming about eight billion euros for the 51-percent interest in YPF seized by the government. However, a report in Argentinean daily La Nación quoted unnamed government officials as saying the administration of President Cristina Fernández de Kirchner aims to pay nothing for the stake, and is looking for accounting irregularities in YPF’s books.
Repsol’s shares fell a further 5.97 percent on Monday. The company has now lost about a fifth of its market capitalization since the nationalization of YPF was announced a week ago.
“Spain is considering all measures that could bring Argentina back to the negotiating table,” García-Margallo told reporters in Luxembourg where he was attending a meeting of his European Union counterparts. “What this is about is finding a negotiated solution,” he added. “If not, then let them comply with what the arbitration tribunals decide,” the minister said.
Spain’s claims the expropriation is illegal. Argentina has accused Repsol of skimping on investments.
García-Margallo indicated there was scant hope of Argentina reversing its decision. “We do not dispute Argentina’s right to go for energy sovereignty, although in my opinion this is an error in the 21st century,” he said.
Spain has already announced restrictions on imports of Argentinean biodiesel. García-Margallo asked his European colleagues to back action by the European Union against Buenos Aires in reprisal for the expropriation of YPF.
Spain wants the EU to file a complaint on the issue with the World Trade Organization and to end trade advantages afforded to Argentina by the bloc under the WTO’s generalized system of preferences. Madrid would also like the EU to walk away from signing a trade deal with Mercosur, the Southern American trading bloc that groups Argentina with Brazil, Uruguay and Paraguay.
“All the measures that might make Argentina return to international legality will be studied by the European Council but I insist that the Council doesn’t take decisions; it’s the European Commission that takes the decisions,” García-Margallo said.
British Prime Minister William Hague, whose country has suffered trade restrictions recently by Argentina over the disputed Falkland Islands, called on the EU to “very seriously consider the measures proposed by Spain,” according to European sources.
Meanwhile, Repsol warned off other foreign oil companies from trying to take its place at YPF. “Repsol reserves the right to take legal action against any investor in YPF,” company spokesman Kristian Rix told Bloomberg.
Argentina has reportedly been in touch with Brazil’s Petrobras to gauge its interest in working with YPF and plans to do the same with Chevron and ExxonMobil.