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Repsol will drag Argentina through courts

Nov. 20, 2012 at 6:23 PM   |   Comments

BUENOS AIRES, Nov. 20 (UPI) -- Frustrated by several months of fruitless fighting for a compromise, Spanish energy major Repsol warned Argentina it will drag its government through international courts to secure fair compensation for the loss of YPF.

In April Argentine President Cristina Fernandez de Kirchner appropriated Repsol's majority stake in Argentine subsidiary YPF, the Latin American nation's principal oil producer and distributor.

Talks on a compensation settlement for the Spanish company stalled amid continuing disagreements between the Fernandez administration and Repsol. Spurred by popular Argentine support for the seizure, Fernandez has brushed aside most Repsol initiatives so far.

An intervention by King Juan Carlos of Spain and numerous interventions by Spanish Prime Minister Mariano Rajoy also failed to stir Buenos Aires.

Repsol Chairman Antonio Brufau told El Pais newspaper in Madrid the company would continue to pursue compensation even if that meant taking the matter to court at an international level.

Brufau is under mounting shareholder pressure to produce better results from his efforts to secure a compensation deal. He was repeatedly criticized for his handling of the YPF expropriation, which wiped $17 billion off the market value of Repsol, Spain's largest oil producer.

He told El Pais he still believes and hopes for an agreement through dialogue "to compensate us for that which belonged to us."

Repsol took Argentina to court in the United States in May, seeking more than $10 billion in compensation. Fernandez, who accuses Repsol of not investing enough of its profits, has been seeking international investors, another major irritant for Repsol.

Repsol is also in litigation with Chevron over "disloyal competition," after the U.S. company reached an agreement with nationalized YPF to conduct explorations in the Vaca Muerta region, known to contain at least 23 billion barrels of oil.

YPF is seeking investors in a planned $37.2 billion expansion plan for YPF but Argentina's relationship with Chevron is mired in controversy over its operations in the country and over an ongoing dispute with Ecuador.

The U.S. company faces mounting pressures in Argentina over its disputes with both Argentina and Ecuador.

Argentina wants Chevron to step up investments even as it battles an Argentine court embargo on its existing assets in the country. On Nov. 7, Argentine Civil Judge Adrian Elcuj Miranda ordered 40 percent of Chevron's Argentine bank accounts to be held in escrow after receiving a petition from Ecuadorian plaintiffs seeking to enforce a $19 billion award in that country.

Meanwhile, YPF has lost about 70 percent of market value since its nationalization.

© 2012 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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