Repsol Sues Argentina’s Bridas Over Shale Development With YPF

Repsol SA (REP), Spain’s biggest oil company, has sued Bridas Group after the Argentine company bought rights to a $1.5 billion project to develop oil from shale fields that were expropriated from Repsol.

The lawsuit alleges the oil holding company controlled by the billionaire Bulgheroni brothers committed unlawful competition by seeking to profit from assets illegally confiscated from Repsol, according to a person familiar with the claim. The lawsuit was admitted to the Madrid Mercantile court Feb. 18 against Bridas International SA and Bridas Energy Holdings Ltd., according to court documents obtained by Bloomberg.

Repsol is taking legal action against oil companies that are doing deals with YPF, its Argentine unit that was nationalized by that country’s government without compensation. The expropriation of YPF, Argentina’s biggest oil company, was done months after the company discovered billions of barrels of shale oil in the Vaca Muerta formation.

Madrid-based Repsol is seeking $10.5 billion for a 51 percent stake in YPF at the World Bank’s International Centre for Settlement of Investment Disputes in Washington.

Mario Calafell, spokesman for the Bulgheroni family, didn’t immediately return a phone call or an e-mail seeking comment. Repsol officials declined to comment. The filing was reported earlier today by news websites Europa Press and InfoLibre.

Bridas, controlled by Alejandro and Carlos Bulgheroni and China National Offshore Oil Corp., signed an accord with YPF for stakes in some areas of Vaca Muerta in southwestern Argentina on Dec. 28. The agreement with Bridas is the second venture announced by YPF since the seizure of YPF in April.

Chevron Lawsuit

Three months ago Repsol accused Chevron Corp. (CVX) of improperly obtaining rights to develop Argentine shale from YPF in negotiations with officers appointed by Argentina’s government, not “legitimate managers” appointed by Repsol as its majority shareholder. James Craig, a spokesman for Chevron, said at the time there was no legal basis for Repsol’s suit, filed in a Manhattan federal court.

Bridas group’s Virgin Islands-based Bridas International and Bridas Energy Holdings units filed a lawsuit against Repsol on Jan. 3 to prevent the company from blocking its deal with YPF, according to court documents filed in New York. The partnership plans to drill 130 wells for which Bridas has promised to provide as much as $500 million in financing.

YPF is seeking to develop the Vaca Muerta shale formation in Argentina’s Neuquen province, which is estimated to hold at least 23 billion barrels of oil equivalent, according to a report released by independent auditor Ryder Scott in February last year. YPF owns about 13 billion barrels of that total, the report said.

Repsol, which previously was called Repsol YPF SA (YPFD), lost as much as 37 percent of its market value in the three months after Argentina announced the nationalization on April 16.

The stock has since recovered all but 3.3 percent of its share price, closing today unchanged at 16.90 compared with its April 16 close of 17.48 euros.

To contact the reporter on this story: Patricia Laya in Madrid at playa2@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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