Repsol’s board of directors approves $5-billion compensation deal for YPF seizure

Repsol’s board of directors on Tuesday approved an agreement with the government of Argentina in which the Spanish oil giant will receive $5 billion (some 3.64 billion euros) for the 2012 expropriation of 51 percent of its holdings in YPF, the company announced in a statement.

As part of the agreement, Repsol and the government of President Cristina Fernández de Kirchner will each drop their lawsuits and complaints in the dispute they have filed in international forums.

The deal will now go before Repsol’s stockholders and the Argentinean Congress for final approval, the statement said.

Repsol had been seeking $10.5 billion for its share. Last June, the firm’s directors had rejected the same $5-billion offer made by Buenos Aires, calling it “unsatisfactory.”

Argentina has agreed to reimburse Repsol in cash and include clauses that will allow the Spanish company to seek reparations if Buenos Aires does not comply with the payment before the UN Commission on International trade Law (Uncitral).

In a surprise move, Fernández de Kirchner announced in 2012 the expropriation of Repsol's holdings in YPF after she accused the Spanish company of failing to meet the terms of their agreements. The takeover was immediately approved by the Argentinean Congress.

Repsol accused the government of making its move after the Spanish company announced the discovery of a huge shale gas find in the country's Vaca Muerta oil field.

The dispute had soured political and economic relations between Buenos Aires and Madrid.