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 Under terms of the proposal to be considered Wednesday by Repsol's
board, the Spanish company would get the money in Argentine bonds
denominated in U.S. dollars. In return, it would drop legal action
against Argentina for expropriating Repsol's controlling stake in
YPF in 2012 without payment, said the person, who was not authorized
to disclose details and spoke on condition of anonymity.
Investors on Tuesday cheered the news, sending Repsol shares up 4.28
percent to close at 19.24 euros ($26.03) in Madrid.
News of the deal came late Monday after Repsol executives met in
Buenos Aires with government officials from Argentina and Spain and
the chief executive of Mexico's state oil company, Petroleos
Mexicanos, which holds a minority stake in YPF.
The deal could pave the way for Pemex to join the exploration of the
vast Vaca Muerta oil deposit in Neuquen province, where YPF says 15
teams are already extracting more than 10,000 barrels a day.
Argentina's Economy Minister Axel Kicillof, the mastermind behind
the YPF expropriation, remained coy about the compensation deal.
"The agreement is somewhat confidential because you can't just go
around carelessly throwing out values," said Kicillof, who is now
leading Argentina's negotiations. "It could affect shareholders and
affect the stocks."
Kicillof said that at the time of the takeover, Repsol was too hasty
when it demanded $15 billion in compensation and later $10.5
billion.
"The Argentine state acted with a lot of prudence and sobriety," he
said. "We're waiting to know more about the company to be able to
give it a fair value, but I think Repsol acted rash by giving out
just the numbers they wanted."
The values and instruments of the deal will remain secret until
Repsol's board votes on the proposal on Wednesday, Kicillof said. He
added that Argentina is satisfied with YPF's performance after it
seized control of its leading oil company from Spanish hands.
"But we're now here to look forward," he said. "We want to finish
determining these values to close this deal once and for all."
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The seizure of YPF infuriated Spain and led to harsh criticism of
Argentina by the European Union, the United States and some Latin
American leaders. Argentina had claimed Repsol SA was not investing
enough in the South American country's oil industry — claims
vigorously denied by Repsol.
The expropriation of Argentina's national oil company, which was
privatized in the 1990s, was hugely popular among Argentines because
many blame privatizations and other free-market policies of that
decade for the country's economic crisis and debt default in
2001-2002.
Repsol had said its 51 percent stake in YPF was worth $10.5 billion
in compensation and sued Argentina seeking payment.
The fight also strained ties between Spain and Argentina, and a
statement released by Argentina's economy ministry said negotiators
hoped the deal would "contribute to normalize and strengthen the
historic ties between the three countries and their companies."
Argentina has the world's third-largest deposits of shale oil and
gas, but needs international help to develop them. Only Chevron has
so far made a commitment to help develop the fields, and it was
subsequently sued by Repsol.
[Associated
Press; ALAN CLENDENNING, AP Business Writer]
Associated Press writer
Almudena Calatrava in Buenos Aires, Argentina contributed to this
report.
Copyright 2013 The Associated
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