In April 2012, Argentine President Cristina Fernández de Kirchner illegally seized Respol's 51% stake in the South American energy company YPF SA, in order to put the company under the control of the Argentine government. To try and compensate Repsol for their loss the Argentine government offered $5 billion, but it was rejected as the Spanish company stated that it "does not equal the losses suffered by Repsol."
Although they also stated that "the board of directors of Repsol and its executive team are pleased to note the interest of the Argentinean government in a negotiated solution."
The $5 billion deal was in the form of a 47% stake in the giant Vaca Muerta formation, valued at $3.5 billion, and an extra $1.5 billion in cash that can be used to develop the formation.
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This is a rather cheeky offer from Argentina, as it benefits them as well by helping to develop the huge shale field, for which they have been struggling to find investors and partners. Quite rightly Repsol are unwilling to return to Argentina and its untrustworthy government.
Repsol has filed various lawsuits against Kirchner's government, from Madrid to New York, demanding compensation in the region of $10.5 billion for their share of YPF (more than double the rejected offer).
According to the EIA, Argentina has the world's second largest shale gas reserves, and the fourth largest shale oil reserves, with the Vaca Muerta being one of the largest discoveries in the world.
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com More