Wednesday

8th Feb 2023

EU gets behind Spain on Argentina oil grab

  • Repsol-sponsored biker. The FT reports the Spanish firm was trying to sell its subsidiary to China (Photo: ImageNationPhotography)

The European Commission has sharply criticised Argentina's plan to nationalise Spanish energy firm Repsol YPF, with EU foreign ministers to discuss the issue next week.

"I am seriously disappointed about yesterday’s announcement. We expect Argentina’s authorities to uphold their international commitments and obligations in particular with those resulting in bilateral agreements on protection of investments with Spain," EU commission President Barroso told reporters on Tuesday(17 April) in Brussels.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

Argentine President Cristina Fernandez de Kirchner on Monday announced the takeover of the Spanish-owned firm, one of the largest in South America.

With a 57 percent stake, Repsol is the majority shareholder in YPF, which they value at some €7.9 billion. Fernandez is sending a bill to congress to finalise the act which would leave Repsol with a 6 percent share in the company.

The EU commission said Argentina's decision to take control of the company without adequate and fair compensation is illegal. The executive, along with the Spanish authorities, warned action would be taken in the next few days.

For her part, EU foreign policy chief Catherine Ashton said: "The measure creates legal uncertainty for all EU and foreign firms in the country. The Spanish government has our full backing in this matter."

EU foreign ministers are to discuss the issue on Monday. An EU-Argentine joint committee meeting has been postponed in the meantime.

"These actions will not remain unpunished," Repsol executive chairman Antonio Brufau warned. He added that: "[Fernandez] carried out an unlawful act and made unlawful charges after a campaign aimed at knocking down YPF shares and allowing expropriation at a bargain price."

According to the company, the YPF takeover will not affect Repsol's business outside Argentina. Repsol posted a €2.193 billion net income in 2011, 53.3 percent lower than that recorded in 2010 while YPF posted €1.352 billion income, a 16.8 percent drop from the previous year.

YPF shares in the company have plummeted following Monday's announcement.

In an insight into what is going on behind the scenes, The Financial Times reports that Repsol had secretly tried to sell the Argentinian branch to a Chinese buyer. The paper also claims Repsol had not informed Buenos Aires of the Chinese buy-out negotiations.

Meanwhile, the UK - a historical antagonist of Argentina - has also hit out against Buenos Aires.

UK foreign minister William Hague said the takeover is part of a wider protectionist agenda. "This goes against all the commitments Argentina has made in the G20 to promote transparency and reduce protectionism," he noted.

In an echo of the 1980s Falklands War, Argentina refused in March to let two British cruise ships dock at the port of Ushuaia in protest at military manouevres around the Falklands islands. In early April, Buenos Aires also warned British and American banks advising UK companies exploring for oil around the islands that the activity is "unlawful."

A vast amount of oil, worth some €140 billion, is believed to lie under the disputed mairitime territory.

"After oil was discovered off the Falklands, she [Fernandez] suddenly revived the Argentine claim," British conservative MEP Charles Tannock said.

The loss of Repsel's Argentinian assets will not affect the Spanish economy, says Joachim Voth, a research professor at the Economics Department, Universitat Pompeu Fabra, Barcelona.

"Repsol's stake is part of Spanish assets abroad. The value of these is going down, as a result of the Argentina seizing part of the company, is not good news. But it has no direct impact on business conditions in Spain itself," he told EUobserver.

Spanish oil company sues Argentina

The Spanish oil and gas giant Repsol-YPF filed a lawsuit against Argentina at a US district court in Manhattan on Tuesday for nationalising its majority-owned stake in the energy company YPF.

MEPs to vote on risky 'hydrogen for home heating' rule

The gas-boiler industry is pushing for hydrogen to be allowed to heat homes — but as well as being riskier for explosions and exacerbating asthma, experts dub domestic hydrogen 'a dangerous distraction'.

Hawkish ECB rate-rise 'puts energy transition at risk'

The European Central Bank raised interest rates by another 0.5 percent to a 14-year high, and expects to hike rates by another half percent in March. But what does that mean for the green transition?

Opinion

The return of Lula means now is the time for EU-Mercosur deal

The EU must realise the need for a trade agreement with Mercosur. The timing has never been better. The recent election of the president of Brazil, Lula da Silva, marks a fresh start to move forward on the Mercosur Agreement.

Latest News

  1. Polish MEP also went on freelance Azerbaijan trip
  2. Why Europe's interminable compromises are a virtue
  3. Wales' message to Europe: 'We'll be back'
  4. MEPs to vote on risky 'hydrogen for home heating' rule
  5. The man who won't stop filing info requests until every EU doc is public
  6. EU hands Libya coast guard boats ahead of migration summit
  7. Eleven suicides daily — Spain's not-so-silent pandemic
  8. The return of Lula means now is the time for EU-Mercosur deal

Stakeholders' Highlights

  1. EFBWWEU Social Dialogue review – publication of the European Commission package and joint statement of ETUFs
  2. Oxfam InternationalPan Africa Program Progress Report 2022 - Post Covid and Beyond
  3. WWFWWF Living Planet Report
  4. EFBWWEFBWW Executive Committee report on major abuses, labour crime and subcontracting
  5. European Parliamentary Forum for Sexual & Reproductive Rights (EPF)Launch of the EPF Contraception Policy Atlas Europe 2023. 8th February. Register now.
  6. Europan Patent OfficeHydrogen patents for a clean energy future: A global trend analysis of innovation along hydrogen value chains

Stakeholders' Highlights

  1. Forum EuropeConnecting the World from the Skies calls for global cooperation in NTN rollout
  2. European Committee of the RegionsRe-Watch EURegions Week 2022
  3. Nordic Council of MinistersCOP27: Food systems transformation for climate action
  4. Friedrich Naumann Foundation European DialogueGender x Geopolitics: Shaping an Inclusive Foreign Security Policy for Europe
  5. Obama FoundationThe Obama Foundation Opens Applications for its Leaders Program in Europe
  6. Nordic Council of MinistersLarge Nordic youth delegation at COP15 biodiversity summit in Montreal

Join EUobserver

Support quality EU news

Join us