By Anthony Harrup and Ilan Brat
Spanish, Argentine and Mexican government officials reached an
agreement in principle Monday to compensate Spanish oil company
Repsol for its controlling stake in YPF S.A., which the Argentine
government expropriated last year.
At a meeting in Buenos Aires, the parties reached a tentative
agreement to fix the amount that Repsol will receive for the 51%
stake it previously held in YPF, with payment to be made in "liquid
assets" and subject to approval by Repsol's board of directors, the
Argentine government said in a statement.
The amount of the compensation wasn't disclosed. Government
officials in Madrid and Buenos Aires weren't immediately available
to comment.
A final agreement on the compensation to Repsol could help patch
up relations between Spain and Argentina, which were strained when
the South American country seized control of its largest energy
company. The YPF expropriation prompted the European country to try
to limit its purchases of Argentine biodiesel. Repsol also launched
an arbitration claim against Argentina with the World Bank.
The preliminary agreement also follows a cabinet shuffle last
week by Argentine President Cristina Kirchner, whose government is
seeking to mend ties with foreign creditors at a time when the
country faces foreign-currency shortages and limited borrowing
options. In recent elections, key candidates from Ms. Kirchner's
leftist faction fared poorly, raising hopes that a new pro-business
administration might succeed hers when her term ends in 2015.
The meeting in the Argentine capital was attended by Argentina's
new economy minister, Axel Kicillof, and Spanish Industry Minister
Jose Manuel Soria. Top executives of YPF, Repsol, the chief
executive of Mexican state oil monopoly Petroleos Mexicanos, which
has a 9% stake in Repsol, and the chairman of Catalan banking giant
Caixabank, Repsol's largest single shareholder, also attended.
Repsol, which currently has a stake of just 12% in YPF, said in
a statement that it would analyze the proposal at a board meeting
Wednesday, and that it will make a decision based exclusively on
what it considers best for the company and its shareholders.
The Argentine government said that the agreement aims to
"normalize and strengthen the historical ties among the three
countries and their companies." It also said that under the accord,
the two sides would drop all lawsuits in the case.
Repsol had rejected an offer from Argentina in June brokered by
Pemex, according to people familiar with the situation. Repsol's
board said that offer didn't fairly value YPF's large oil and gas
field, Vaca Muerta.
Subscribe to WSJ: http://online.wsj.com?mod=djnwires