Repsol board discusses Argentina’s latest offer to compensate for YPF takeover
Argentinean government wants Spanish firm back at Vaca Muerta gas fields
Repsol’s board of directors is expected to meet today to discuss the latest compensation offer from the Argentinean government for its expropriation of the Spanish petroleum giant’s share in YPF last year.
Repsol has been demanding that the government of President Cristina Fernández de Kirchner pay 10.5 billion euros for expropriating the company’s 51-percent share in oil firm YPF. Buenos Aires has rejected paying that amount, saying it expropriated the shares because Repsol did not keep to its side of the bargain, and invest a certain amount of money in the country.
The controversy has set off an international legal battle with Repsol filing suits and complaints against the Argentinean government at global forums.
In an effort to resolve the conflict, the Fernández de Kirchner government is offering Spanish oil officials the opportunity to return to Argentina to participate in the exploitation of at least four fields to extract shale gas from Vaca Muerta, an area in Patagonia discovered by Repsol-YPF in 2010 with vast proven reserves.
The offer was put on the table by Emilio Lozoya, the chairman of Petróleos Mexicanos (Pemex), who traveled to Madrid to meet with Repsol chairman Antonio Brufau. According to the proposal, YPF would offer Repsol a 47-percent participation, while keeping 51 percent in the project. The other two percent would go to Pemex for its help in brokering the agreement.
Although YPF has said Repsol’s interest could rake in around 3.5 billion euros, some in the company believe that estimate is greatly inflated. At the same time, company sources say Repsol would need to spend a lot of money to develop the gas fields of Bajada de Añelo, Bandurria, La Amarga Chica and Aguada del Chañar in Vaca Muerta. In May, YPF signed an agreement with Chevron Corp for joint exploitation projects in Vaca Muerta, prompting Repsol to also file a lawsuit against the US oil firm.
Even though Argentina’s latest proposal will be discussed at Wednesday’s board meeting, company sources said it was almost certain that Repsol officials would reject it.
