Bloomberg News

Repsol Seeks to Block Chevron Deal With YPF Through World Bank

July 25, 2013

Repsol SA (REP) is asking a World Bank panel to help prevent Argentina’s YPF SA from developing assets seized from the Spanish oil producer after Chevron Corp. agreed to invest $1.24 billion in a shale venture in the country.

The request was filed yesterday to the Washington-based International Center for Settlement of Investment Disputes, asking the arbitrator to instruct Argentina to abstain from developing strategic YPF assets such as the Vaca Muerta shale formation, Repsol spokesman Kristian Rix said. The filing couldn’t immediately be verified on the ICSID website and the center didn’t respond to an e-mailed request to comment.

Chevron’s plan to tap Vaca Muerta in an accord with YPF this month comes as Repsol disputes the seizure of its 51 percent stake in the Argentine company by President Cristina Fernandez de Kirchner’s government last year. Repsol has another lawsuit at the ICSID demanding fair compensation for the seizure of its YPF stake, which came shortly after the Argentine company announced Vaca Muerta discoveries of at least 23 billion barrels of oil equivalent.

“We need fair compensation, which is something that, after 15 months, we haven’t seen,” Repsol’s Chief Financial Officer Miguel Martinez said today in a call with analysts. Chevron is interfering with Repsol’s compensation by investing in what it considers illegally confiscated assets, he said.

The claims lack any judicial basis because Repsol never owned rights over Vaca Muerta, YPF said in an e-mailed response to questions. Chevron didn’t immediately respond to requests for comment.

Other Suits

Repsol has separately filed unlawful competition suits against Chevron Corp. (CVX:US) and Bridas Group that are set to be judged in Spain.

Chevron’s investments in Vaca Muerta may reach as much as $15 billion under the accord with YPF.

Argentina holds the world’s second-largest shale gas reserves and the fourth-largest for shale oil, according to U.S. Energy Information Administration data.

To contact the reporter on this story: Patricia Laya in Madrid at playa2@bloomberg.net

To contact the editors responsible for this story: David Risser at drisser@bloomberg.net; James Attwood at jattwood3@bloomberg.net


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