24 April 2012 at 15:00 BST

Oil field take-over triggers litigation threat

Spain's global energy company Repsol is gearing up for a round of litigation in a bid to head off international companies helping the Argentine government exploit a recently nationalised oil field.

Argentina: a merry dance to court over oil rights

The Associated Press news agency reports a company spokesman as saying that the Spanish corporation ‘is reserving the right to take legal action against any investor in YPF [the company’s Argentine unit] ... following the unlawful expropriation of that company.’

'Dead cow' deposits

The company had discovered large oil and gas deposits in the Vaca Muerta (or Dead Cow) basin of Neuquen province, a find that industry experts claim could significantly boost Argentina’s oil reserves, possibly by as much a double current levels. But last week, the Buenos Aires government nationalised the oil field – a move that outraged Repsol and strained relations with ministers in Madrid. The decision also prompted credit agency Standard & Poor’s to put Argentina on ‘negative watch’.

International help

According to AP, industry insiders are convinced Argentina will need expert international help in exploiting the oil reserves, reporting that government officials met last week with executives from France’s Total Austral and Brazil’s Petrobras. Other talks are reported to be planned with US energy giants Chevron and ExxonMobil.
The row and potential legal action have hit Repsol’s share price, which fell by 6 per cent to €10.03 in Madrid at the beginning of this week.
 
   
 
 
 

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