Spanish oil giant Repsol vowed yesterday to fight for at least €8 billion in compensation after Argentina decided to expropriate its subsidiary YPF.
It is not hard to predict that a YPF run by the group that governs Argentina will lose any possibility of making profits
“These acts will not remain unpunished,” said Repsol executive chairman Antonio Brufau, as his company’s shares plummeted more than five per cent on the Madrid stock market.
Mr Brufau said the company would seek international arbitration over Argentina’s decision to take over 51 per cent of YPF, in which Repsol has a 57.4 per cent stake.
Repsol would seek an amount at least equal to the value of its stake in YPF, which the firm estimates at $10.5 billion, the Repsol chief told a news conference.
“Repsol will launch all legal actions that are within its reach,” Mr Brufau promised, saying he had a wide range of options including constitutional, commercial and civil actions. Repsol stock plunged 5.03 per cent to €16.60 by late morning after Argentinian President Cristina Kirchner’s announcement of the state takeover, which ignored warnings from the Spanish government.
Mr Brufau denied Argentine charges that it has failed to invest enough in YPF, saying that it had poured $20 billion into YPF in addition to the $15 billion it paid to buy the subsidiary in 1999.
“The investments have always been much higher than the results,” he said.
The Repsol boss accused Kirchner of taking the decision “as a way of hiding the economic and social crisis which Argentina is suffering.”
He blamed that crisis on “a mistaken energy policy”.
Argentina had run a campaign of “harassment” over past weeks so as to make the YPF share price fall and ease the expropriation at a bargain price, Mr Brufau charged. “It is not appropriate for a modern country, Argentina does not deserve this,” he said of the takeover, which Repsol has described as “manifestly illegal and gravely discriminatory”.
Mr Brufau said YPF accounted for 25.6 per cent of the group’s operating profit, 21 per cent of its net profit and 33.7 per cent of its investments, adding that: “These are big figures but we can withstand them.”
Spain’s government denounced the decision as “hostile” and warned of a forceful response.
Argentina had “broken the climate of friendship” between the two countries, Foreign Minister José Manuel Garcia Margallo told a news conference.
Mr Rajoy is expected to rally support for Spain as he attends an economic forum on Latin America in Mexico. Spain will take “all measures it considers appropriate” to defend the interests of Repsol and Spanish businesses abroad, Industry Minister Jose Manuel Soria told the same news conference.
Front page headlines in Spain lambasted the Argentine takeover, many of them splashing a photograph of Kirchner announcing her decision with a picture of Evita Peron, the populous first lady of Argentina in the 1940s and 1950s, in the background.
“Pillaging,” headlined an editioral by the leading daily El Pais.
“The expropriation of 51 per cent of YPF opens a conflict that will have grave consequences for Argentina,” it said.