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Repsol board backs draft Argentina damages deal over YPF nationalization

Repsol is willing to negotiate an offer by Argentina to compensate the Spanish energy giant for last year’s expropriation of its YPF division. The seizure of YPF assets has strained ties between Madrid and Buenos Aires.

The supervisory board of Repsol had agreed to start formal talks with Argentina over compensation for YPF assets seized by Buenos Aires in 2012, the Spanish oil firm announced late on Wednesday.

“Repsol has decided to start talks soon to find a fair, efficient and quick solution to the controversy,” the firm said in a statement.

The announcement came after the government in Buenos Aires had reportedly offered Repsol damages to the tune of $5 billion (3.6 billion euros) to be paid in Argentine bonds. The sum is half of what Repsol initially demanded after Argentina seized its majority stake in energy company YPF.

In 2012, Argentina nationalized the YPF stake, accusing Repsol of not investing enough in the country's oil industry. The seizure of YPF angered Madrid and has led to harsh criticism from the EU, the United States and some Latin American governments.

Describing the decision by Repsol's board as a good day, Argentina Economics Minister Axel Kicillof said he was hoping the deal would end all pending court cases.

According to Repsol, a majority of the firm's board members voted in support of launching negotiations, including Repsol's main shareholders, Spanish bank La Caixa and construction firm Sacyr. Mexican state oil firm Pemex, which holds a stake of 9.4 percent, voted against the deal saying it didn't offer desirable results for Repsol owners.

uhe/hc (Reuters, AP, AFP)