'Disappointed' EU mulls options against Argentina seizure
(BRUSSELS) - European Commission president Jose Manuel Barroso said Tuesday he was "seriously disappointed" by Argentina's decision to expropriate a subsidiary of Spanish oil giant Repsol.
The European Union is "expecting the Argentinian authorities to uphold international commitments and obligations, in particular those resulting from a bilateral agreement on protection of investments with Spain," Barroso said.
"I have asked commission services to follow this matter up very closely as a matter of priority."
Argentina's decision Monday to take over a 51 percent stake in the country's biggest oil company, Repsol subsidiary YPF, provoked fury in Madrid, which has been in constant contact with the EU on the matter.
High-level talks between the commission and Argentina due to have taken place later this week had been postponed while the EU executive mulled "all possible options", said Commission spokeswoman Pia Ahrenkilde Hansen.
"We will look at what measures we will take," said another Commission spokesman John Clancy.
He said the bilateral investment treaty between Spain and Argentina "clearly contains clauses for nationalisation, including adequate compensation and resolution of disputes.
"The answers are there in black and white," he added.
The move by President Cristina Kirchner "sends a very negative signal to international investors", added Ahrenkilde Hansen.
At a Monday meeting between Kirchner, her cabinet and Argentine governors, an official read a statement saying YPF-Repsol "is declared a public utility and subject to expropriation of 51 percent of its assets."
The stake will then be split up between the Buenos Aires government, which will get 51 percent of those shares, and the oil-producing provinces.
Spain denounced the "hostile" move and warned that it would take "clear and forceful measures" in response.
Repsol vowed to fight for at least $10 billion (eight billion euros) in compensation.
"These acts will not remain unpunished," said Repsol executive chairman Antonio Brufau, as his company's shares plummeted more than five percent on the Madrid stock market.
Brufau said the company, which has a 57.4-percent stake in YPF, would seek international arbitration over Argentina's expropriation.
Repsol would seek an amount at least equal to the value of its stake in YPF, which the firm estimates at $10.5 billion, the Repsol chief told a news conference.
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