MADRID (Reuters) - Oil major Repsol (REP.MC) warned it could take legal action against companies that invest in YPF after Argentina seized control of the Spanish company’s energy unit last week.
Argentina expropriated the 51 percent of YPF (YPFD.BA) owned by Repsol, saying that the company needed to invest more to address the South American country’s energy shortage.
Argentine Planning Minister Julio De Vido approached Brazil’s state-run oil company Petrobras over investment in YPF last week and plans to contact other foreign oil companies such as Exxon (XOM.N), Chevron (CVX.N) and ConocoPhilips (COP.N).
“Repsol reserves the right to take legal action against companies’ investment in YPF,” a Repsol spokesman said on Monday.
Argentina needs hefty foreign investment to help develop its shale gas reserves, the third largest in the world.
European, U.S. and Mexican officials have all criticized Argentina’s expropriation of YPF, the country’s biggest oil company, but the effects of retaliation may be limited as Argentina in the past has failed to pay settlements stemming from international trade disputes.
The only concrete measure Spain has taken so far was to curtail multimillion-dollar imports of biodiesel from the Latin American nation.
In Luxembourg, Spanish Foreign Minister Jose Manuel Garcia-Margallo was to meet with his European Union counterparts on Monday and ask them to consider measures against Argentina, which has said it will not pay Repsol the full price for YPF.
Whatever the outcome of the foreign ministers’ meeting today, no swift action against Argentina is expected, as Europe’s trade ministers would also have to consider any proposals and, ultimately, it would be up to the European Commission to decide on sanctions.
Karel De Gucht, the European Union’s trade commissioner, wrote to Argentina last week to express the bloc’s “serious concerns about the overall business and investment climate in Argentina,” singling out the YPF takeover and import curbs for criticism.
“The EU keeps open all possible options to address this matter,” his letter read.
Also last week, the European Parliament urged the Commission to consider reprisals such as the suspension of trade benefits, mirroring a recent decision by Washington.
Reporting By Fiona Ortiz and Tracy Rucinski; Editing by David Cowell