Spain slams Argentina for its move to seize oil firm

 
Marion Dakers
SPAIN rounded on Argentina’s move to seize control of oil giant YPF yesterday, threatening swift economic retribution for the nationalisation plan.

Spanish industry minister Jose Manuel Soria promised “consequences” in the coming days. “They will be in the diplomatic field, the industrial field, and on energy,” he said.

And Repsol, the current owner of a majority stake in YPF, also pledged legal action worth up to $10bn for the “manifestly unlawful and gravely discriminatory” act.

Shares in Repsol, which generates more than a fifth of its net income from the stake, fell six per cent yesterday. There were also reports in the Chinese press that Sinopec had been in talks with Repsol to buy some of YPF’s stake before Argentina made its plans known.

Argentinian President Cristina Fernandez de Kirchner on Monday tabled legislation to reclaim YPF, which Repsol has said is worth $18bn as a whole.

European Commission president Jose Manuel Barroso urged Argentina to uphold international business accords with Spain.

Europe’s trade chief will write to his Argentinian counterpart to “reiterate our serious concerns” while an EU-Argentina meeting this week would be postponed.

Under international rules, however, Spain cannot limit imports from Argentina.

But Argentina’s pounce on YPF could galvanise international opposition to the nation’s claims of sovereignty on Britain’s Falkland Islands, one analyst said yesterday.

“What could be bad news for investors in Argentine operations could in fact be good news in the long run for those investing in the Falklands.” said Ian McLelland, head of oil and gas at Edinson Investment Research.

Edison was among the banks and research institutions that received threatening letters from the Argentinian authorities earlier this month for writing about oil firms operating in the Falklands.