Repsol approves a $5B settlement with the government of Argentina, ending a 2-year dispute over the seizure of the company's operations in the country.
MADRID/BUENOS AIRES, Feb 25 (Reuters) - Spanish oil major Repsol said on Tuesday its board of directors approved a $5 billion settlement with the government of Argentina, ending a two-year dispute over the seizure of the company's operations in the country.
Though the compensation is half of what Repsol initially demanded after Argentina expropriated its majority stake in energy firm YPF, the company has been eager to end a rocky chapter in its history and avoid a drawn-out legal fight.
Argentina hopes the agreement will help it attract foreign investment in the country, which holds one of the world's most promising shale gas and oil formation.
"I think to finally reach a friendly agreement on this contentious issue that has taken two years is extremely positive," Repsol Chairman Antonio Brufau said in a video message that accompanied a statement on the terms of the deal.
YPF President Miguel Galuccio, speaking to reporters in Buenos Aires, praised the deal as a crucial step for Argentina's economy. "YPF is a fundamental tool for the country's energy future and I believe the expropriation has given that tool back to Argentines."
Under the agreement, Repsol will receive a package of three dollar-denominated Argentine sovereign bonds with a nominal value of $5 billion. It will also receive additional bonds for a maximum face value of up to $1 billion to compensate for the market discount on the first group of bonds.
Argentine sovereign bonds mostly trade at a steep discount since the country defaulted on international debt in 2002.
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