Repsol backs away from LUKoil deal

Nov. 25, 2008 at 4:14 PM

MADRID, Nov. 25 (UPI) -- Spanish oil refiner Repsol backed out of a deal with Russian energy firm LUKoil over concerns expressed by the central government.

Spanish bank La Caixa, which holds a 12.5 percent stake in the independent oil company, filed papers Friday confirming it was in talks with LUKoil. Spanish construction group Sacyr Vallehermoso said it was looking to drop its 20 percent share in Repsol to pare losses from debt-backed financing.

Repsol, however, said in market filings Monday that it was backing out of the deal, adding there was no "external petition" influencing its decision, the Financial Times reported.

The Spanish government of Jose Luis Rodriguez Zapatero had put pressure on the Repsol move, saying it was wary of letting the company slip into foreign hands. The government also said it was worried about the effects the sale by Sacyr would have on the Spanish banking sector, as the firm struggles to support its $6.5 billion in debt.

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