Spain's Repsol Faces $5.5 Billion Claim From China's Sinopec

LONDON—Repsol SA said it faces a $5.5 billion arbitration claim from Chinese state-controlled energy company Sinopec.

The claim relates to a U.K. joint venture between the Chinese and a Canadian firm which the Spanish oil producer acquired last year.

Sinopec International Petroleum Exploration and Production Corp. and its subsidiary Addax Petroleum U.K. Ltd. have initiated arbitration proceedings against Talisman Energy Inc.--today known as Repsol Oil & Gas Canada Inc.--for the repayment of their investment in the joint venture in 2012, Repsol said on Friday.

The claim, in which Talisman Colombia Holdco. is also named, includes a demand for compensation for subsequent investment in the British business and any loss of opportunity, Repsol said on Friday.

The Spanish company said the claim is "baseless" and considered a "remote risk" to Repsol and Talisman.

Officials at Addax weren't immediately reachable for comment.

Addax, which owns a 49% stake in Talisman Sinopec Energy UK, intends to maintain its holding in TSEUK, Repsol said.

"The claimants' proceedings can be interpreted as a defensive action undertaken by those who adopted an investment decision in the U.K. which hasn't delivered the results expected by them, as it has also happened with other investments by this group of companies," Repsol said.

Aberdeen, Scotland-based TSEUK is a North Sea-focused oil and gas exploration and production company.

Write to Razak Musah Baba at [e-mail]

(END) Dow Jones Newswires

June 17, 2016 08:25 ET (12:25 GMT)

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