YPF oil: EU condemns Repsol state seizure

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The European Parliament has passed a resolution condemning a nationalisation that has strained relations between Spain and Argentina.

Argentina has nationalised YPF, wiping out the Spanish firm Repsol's controlling-stake in the oil firm.

The resolution asks the European Commission to consider a "partial suspension" of tariffs that benefit Argentine exports into the EU.

Shares in Repsol has another decline, falling 2.3% on Friday.

Over the week, Repsol stock has lost almost a fifth of its value.

MEPs in the European Parliament said the institution "deplores" the decision taken by Argentina and describes it as an "attack on the exercise of free enterprise".

Decisions such as that taken by the Argentine authorities "can put a strain on the climate of understanding and friendship needed to reach" a trade agreement between a South American bloc and the EU, it said.

The resolution, which is non-binding, received 458 votes in favour, 71 against and 16 abstentions.

'Not valid'

It also emerged that Repsol may be obliged to buy a minority shareholder's YPF stake if it ever lost majority control, which Repsol denied.

Twenty-five percent of YPF is owned by Argentina's Eskenazi family through its firm, Peterson.

According to regulator filings of a 2008 agreement, Repsol must "maintain directly or indirectly through controlled companies an ownership interest greater than or equal to 50.1%".

If it does not, Repsol is obliged to buy back the loans used to secure the Eskenazis' shares.

But Repsol told the BBC that the expropriation of its stake in YPF had invalidated the agreement.

"The agreement is not valid under Spanish law in these conditions," said Kristian Rix, a Repsol spokesman. "The law is unequivocal, there is no debate."

Trade war brewing?

Spain has threatened retaliation against Argentina over the forced nationalisation of oil firm YPF, raising the prospects of a trade war between the nations.

Spanish Trade Secretary Jaime Garcia Legaz said the European Union would intervene over Argentina's seizure of YPF.

Argentina is taking over 51% of YPF, wiping out Repsol's 57.4% majority stake.

The move has wide support in Argentina but has provoked outrage in Spain.

Spain's Foreign Minister Jose Manuel Garcia-Margallo said US Secretary of State Hillary Clinton had also offered support.

Repsol has said it wants around $10bn (£6.2bn) for its stake in YPF, but Argentina has said it does not accept that valuation.

YPF, Argentina's biggest oil company, was privatised in 1993. Last year it announced huge new finds of shale oil and gas.

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