“The rupture of a relationship between Spain and Argentina wouldn’t just be a rupture in economic terms,” Spanish Foreign Minister Jose Manuel Garcia Margallo told reporters today in Madrid. “It would be the rupture of a long-standing fraternal relationship. It would be the worst-case scenario that we can imagine.”
Repsol’s YPF SA (YPFD) unit has been under pressure since January as Fernandez and regional governors push the country’s biggest oil producer to boost output and investments. Cabinet Chief Juan Manuel Abal Medina and Jujuy province Governor Eduardo Fellner have said all options are on the table regarding a possible takeover. Repsol owns 57 percent of YPF. (YPF)
Fellner yesterday rejected a report in Buenos-Aires based newspaper Clarin that said the government plans to send Congress a bill authorizing it to take a 50.01 percent stake in YPF. Fellner’s comments came after officials of the country’s 10 oil- producing provinces met with Fernandez at the presidential palace.
“Everything is under review,” Fellner told reporters. “There is no legal proposal yet, there are just press rumors.”
Fernandez didn’t address YPF in a speech about beef export taxes yesterday.
YPF jumped 8.6 percent in New York trading yesterday, the most in a month, after Clarin said the government would ask Congress to declare 50.01 percent of the YPF’s shares to be in the “public interest.”
The Argentine securities regulator will probe yesterday’s stock price gains, according to state-news agency Telam. About half of yesterday’s deals on the local stock market were YPF transactions, Telam said in a statement.
The proposal would allow Argentina to buy the full 100 million shares owned by the Eskenazi family’s Petersen Group and another 96.6 million from controlling shareholder Repsol, Clarin said.
YPF fell 3.3 percent to 118.9 pesos at the close today in Argentina. YPF’s American depositary receipts have tumbled 47 percent in New York since Jan. 23 as the dispute with the government intensified. Repsol has dropped 20 percent in Madrid in the same period.
‘Act of Aggression’
Fernandez, 59, has sought more investment from oil companies in an attempt to boost sagging production and reduce fuel imports that doubled to $9.4 billion last year. Provincial governments have revoked 15 of YPF’s 104 oil field licenses, or 16 percent of its production, since March 13.
A move against YPF “will be considered an act of aggression by the Spanish government which will take measures it considers appropriate,” Margallo said today. The minister also requested talks with Argentina’s ambassador.
Repsol hasn’t received any information from Argentine authorities, the company said today.
“The government will take the measures that are necessary,” Deputy Prime Minister Soraya Saenz de Santamaria told reporters in Madrid. “Measures aren’t announced, they are taken. We hope that we won’t have to take measures but we will if we have to.”
The European Commission has also “expressed its concerns to the Argentine government,” commission spokesman Olivier Bailly told reporters in Brussels today. It’s a “bilateral” issue between Spain and Argentina and investment isn’t covered by EU trade accords with South America, he said.
“All parties have to find mutually acceptable solutions that do not damage the working relations and economic ties between Argentina and the European Union,” he said.
To contact the editor responsible for this story: Dale Crofts at email@example.com