Mexico sells €2.2bn stake in Spain oil giant Repsol

GMT 03:23 2014 Wednesday ,04 June

Arab Today, arab today Mexico sells €2.2bn stake in Spain oil giant Repsol

Spanish oil giant Repsol's headquarters
Madrid - AFP

Madrid's stock market suspended trading in oil giant Repsol on Wednesday following an announcement that Mexico's state-owned Pemex is selling a 2.2-billion-euro ($3 billion) stake in the Spanish group.
After months of tension between the two oil groups, Repsol said in a statement on Tuesday that Pemex would sell a 7.86-percent stake in Repsol, with investment banks Citigroup Global Markets and Deutsche Bank handling the deal.
The shares being sold by Pemex, which represented most of its 9.34-percent Repsol holding, had a value of 2.2 billion euros at the close of trade on Tuesday.
On Wednesday, the Spanish stock market regulator suspended Repsol shares so as to avoid disrupting market trade following the announcement.
Pemex chief executive Emilio Lozoya had strongly criticised Repsol's handling of a conflict with Argentina, which in 2012 seized and nationalised Repsol's 51-percent owned unit YPF.
Repsol announced May 23 it had exited Argentina, pocketing $6.3 billion in compensation and asset sales after Buenos Aires' takeover of YPF.
The news marked the final chapter of a bitter row sparked in April 2012 when Argentina's President Cristina Kirchner ordered the nationalisation of Repsol's 51 percent-owned YPF unit.
Repsol said it had earned $5 billion from the sale of Argentine government bonds, which had been paid by Buenos Aires in compensation over the seizure of YPF.
Buenos Aires' seizure of the YPF operations forced Repsol to make provisions of 1.28 billion euros in 2013 and sent its profits for that year plunging by 90 percent.
For YPF, settlement of the dispute with Repsol could remove legal questions over its assets, helping to lure foreign investment to the vast Vaca Muerta shale oil and gas field in Argentina, which YPF discovered in 2010.
The Vaca Muerta find is estimated to contain the equivalent of 22.8 billion barrels of oil, described by Repsol at the time as the largest discovery in its history.


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