MADRID, (Reuters) – Spain yesterday threatened Argentina with retaliation if it nationalised oil major Repsol’s YPF operation, raising the stakes in a long-running row over production at the Argentine unit.
Spain’s secretary of state for EU affairs Inigo Mendez de Vigo warned that Argentina would become “an international pariah” if it were to go through with such plans.
“I think that if it happens, it would be very bad news for everybody, but also for Argentina because in the international community we live in, breaking the rules bears a cost,” he said.
YPF, Argentina’s largest oil and gas company which provides 25 pct of Repsol’s operating profits, has been under fierce state pressure to raise production as costly fuel imports eat into Argentina’s trade surplus.
A proposal by YPF to boost investment to a record 15 billion pesos ($3.4 billion) was rejected as inadequate by the Argentinean government.
“If a (nationalisation) decision were taken it would be very negative for Spanish interests and the duty of this government is to defend Spain’s interests with all its might,” Deputy Prime Minister Soraya Saenz de Santamaria said after a weekly cabinet meeting.
“If the government had to take measures it would, without a doubt,” she said.
