Repsol board agrees to open talks with Argentina over YPF
THE BOARD of Spain’s Repsol unanimously agreed yesterday to start formal talks with Argentina over a compensation offer for assets Buenos Aires seized last year that could end an 18-month standoff between the two countries.
Sources with knowledge of the matter have told Reuters that the deal is worth $5bn, half of what Repsol was initially demanding after Argentina seized its majority stake in energy company YPF in 2012.
“With the aim of developing a preliminary agreement, Repsol has decided to start talks soon between its teams and the Argentine government to find a fair, efficient and quick solution to the controversy,” Repsol said in a statement, without providing details of the offer.
It has hired an international investment bank to oversee the process.
Bilateral ties between Spain and Argentina have been on ice since the nationalisation in April 2012, so any deal has significance beyond Repsol’s own interests, particularly for Argentina as it seeks to restore investor confidence.
Argentine President Cristina Fernandez is trying to attract the billions of dollars needed to exploit the Vaca Muerta shale formation to help bolster central bank reserves drained in part by costly oil and gas imports.
Sources have said the settlement, which has the backing of the Argentine and Spanish governments, was likely to be in the form of US dollar-denominated sovereign bonds rather than cash.