17
Apr

By Miles Johnson in Madrid and Jude Webber in Buenos Aires

Antonio Brufau, Repsol ececutive chairman, has vowed to fight for at least $10.5bn in compensation from Argentina

The Spanish group Repsol has accused Argentina of seizing YPF, its local oil company, in an attempt to cover up the country’s economic and social problems, and said it would seek at least $10.5bn in compensation as tensions escalated between Madrid and Buenos Aires.

The European Commission lent its support to Spain and Repsol said it would launch international arbitration against the government of Cristina Fernández. In a fiery, televised, speech on Monday, Argentina’s president said she was sending a bill to Congress to expropriate 51 per cent of YPF.

“These acts will not go unpunished,” said Antonio Brufau, Repsol’s executive chairman during a two-hour press conference on Tuesday, at which he attacked Argentina’s “revisionism” over YPF’s success, and its energy policy over the past decade.

“The Argentinian president has committed an illegal and unjustifiable act following a campaign intended to push down the share price of YPF and allow expropriation at a low price,” he said. “This is just a way of covering up the social and economic crisis facing Argentina.”

Spain has promised “clear and decisive action” against the move in the areas of trade, diplomacy, industry and energy, and summoned Argentina’s ambassador on Tuesday morning.

Madrid has expressed its confidence that fellow European Union members will support it against Argentina, while Mariano Rajoy, prime minister, is using a previously scheduled trip to Latin America to rally allies.

The European Union signalled it would throw its full diplomatic and economic weight behind the Spanish government. José Manuel Barroso, president of the European Commission, said he was “seriously disappointed” by the Argentine move and called on Ms Fernandez to find a “mutually agreed solution” to the stand-off that does not harm Argentina’s business environment. Read more…

As published in www.ft.com on April 17, 2012.

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