Latin America & Caribbean

YPF oil: Spain prepares response to Argentina

A worker stands beside a YPF tanker lorry in Argentina
Image caption Argentina says it will not back down over the nationalisation

Spain says it is rallying international support against Argentina's nationalisation of the oil firm, YPF.

Spanish Trade Secretary Jaime Garcia Legaz said the EU would intervene over Argentina's seizure of the controlling stake in YPF from Spanish firm Repsol.

Foreign Minister Jose Manuel Garcia-Margallo said US Secretary of State Hillary Clinton also offered support.

But Argentine officials said they were not worried by possible reprisals over the nationalisation.

Argentine President Cristina Fernandez de Kirchner announced the measure on Monday, saying she was asserting sovereignty over Argentina's energy resources.

Her government is taking 51% of YPF, wiping out Repsol's 57.4% majority stake.

The move has wide support in Argentina but has provoked outrage in Spain, which has threatened reprisals.

The Spanish government will consider what measures to take at a cabinet meeting on Friday, and has also been rallying international support.

"There are going to be very clear interventions on the part of the European Union," Trade Secretary Jaime Garcia Legaz said, without revealing further details.

It is not clear what any reprisals might involve.

'Road to nowhere'

EU foreign ministers are expected to discuss the issue at a meeting in Luxembourg on Monday.

Spanish Foreign Minister Jose Manuel Garcia-Margallo said Spain would also raise the issue with the IMF, the World Bank and the G-20.

"We will try to pressurise Argentina so that it sees that this road is going nowhere," he said after meeting Hillary Clinton.

He added that Spain and the US had agreed to work together to "re-establish international legality".

But the Argentine government says it will not back down in its decision to nationalise YPF, which it says is a lawful action taken in the national interest.

"The government takes its decisions thinking about the Argentine people and not what the US or the Spanish government think," Interior Minister Florencio Randazzo said.

"We are not worried about any kind of reprisals," he added.

Repsol has said it wants around $10bn for its stake in YPF, but Argentina has said it does not accept that valuation.

It says YPF did not invest enough to increase output from its oil fields, forcing Argentina to rely on imports.

YPF, Argentina's biggest oil company, was privatised in 1993.

Last year it announced huge new finds of shale oil and gas.

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