Repsol Rejects YPF Compensation Offer, Spain

Repsol said its Board of Directors has unanimously rejected the compensation offer it had received for the expropriation of YPF and which had been analyzed.

Following an exhaustive technical and economic internal analysis, supported by external specialist reports, the Board of Directors considered unsatisfactory for the interests of the company the offer formulated at a nominal value of $5 billion, as it does not satisfy the losses suffered by Repsol, is constructed on overvalued assets far from market values seen in recent transactions in Argentina and the United States and has a structure which is far from the declared interests of Repsol for an agreement (lacks a realizable or disposable monetary compensation, does not have the minimum necessary legal nor economic guarantees and requires significant and compulsory investment), the company revealed in a statement.

The analyzed offer involved giving Repsol a stake in a joint venture made up of assets representing only 6.4% of the total held by YPF in Vaca Muerta. In the joint venture controlled by YPF (51%), Repsol would have a 47% stake and Pemex 2%. The Argentinean Government valued its offer at $5 billion distributed in stakes of assets in Vaca Muerta worth $3.5 billion and $1.5 billion in capital to be necessarily invested in the development of the venture.

“The Board of Directors of Repsol and its executive team is pleased to note the interest of the Argentinean Government in a negotiated solution and hopes that said government maintains, as Repsol does, an open attitude to dialogue to attempt to reach an agreement, negotiated through the appropriate corporate channels, with the necessary serenity and balance and which represents a fair compensation and the end of the claims surrounding the expropriation,” Repsol added.