Reports that Argentina intends to go ahead with the nationalisation of oil company, YPF have led to warnings from the Spanish government that it will defend its interests. The Spanish firm, Repsol, owns 57% of the company and has said it will seek international arbitration if necessary. Unconfirmed reports say Repsol will demand compensation of at least 7.7bn euros. Rumours over the last few weeks have driven down the price of YPF shares – the company had been under pressure to boost production.
The Argentine ambassador to Spain has been summoned to the foreign ministry today and the “climate of friendship” between the two countries is strained, according to Foreign Minister Jose Manuel Garcia-Margallo. If the takeover goes ahead, it will have a significant economic effect as Spain and Argentina are key trading partners.