Repsol eyes acquisitions after sealing YPF compensation

Five-billion-dollar package will be in dollar-denominated bonds from the Argentinean government

Leading Spanish oil company plans to use the 5 billion dollars it has agreed to accept from the Argentinean government as compensation for the expropriation of a 51-percent stake in YPF to go on the acquisition trail to reinforce its operations.

Repsol also still has a 12-percent stake in its YPF unit worth some 1 billion euros which it can sell off when it sees fit and thus gain even more financial clout.

The company is currently weighing up its options with the focus on reinforcing its exploration and production division. Repsol had been thinking of selling its stake in Spanish utility Gas Natural to boost resources with which to expand the operations of the division, but will no longer have to do so unless a major acquisition opportunity presents itself.

The compensation will be in the form of dollar-denominated bonds issued by the Argentinean government, which Repsol will be free to offload as it pleases. Repsol’s board approved the agreement on Tuesday.

Argentina expropriated the stake in April 2012 after accusing Repsol of failing to invest enough. The chairman of YPF, Miguel Galuccio, on Tuesday said the two companies could now look forward to a “more constructive” future after leaving the expropriation dispute behind them. Repsol agreed to drop international arbitration proceedings against Argentina and to forego any further claims.

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