Repsol Says Argentina Parliament Approves Compensation Deal

By Ilan Brat 

MADRID--Argentina's parliament Thursday approved a deal that would compensate Spain's Repsol SA for the expropriation of its local unit two years ago, the Spanish oil company said in an emailed statement.

The terms of the deal, in which Argentina would compensate Repsol with bonds worth around $5 billion, were negotiated during several months starting in late 2013.

The parliamentary approval ends a two-year conflict that flared up following the nationalization.

Argentina expropriated the majority of YPF SA, the country's largest oil and gas company, in April 2012. Since then, the country has struggled to attract foreign investment to raise output from its huge hydrocarbon reserves. Argentine officials have said they expect the end of the tussle with Repsol to help ease the entry of foreign investment into its oil and gas sector.

For Repsol, Argentina's approval seals a two-year saga that threatened the company's investment-grade credit rating and forced the company to sell assets and trim its dividend payout to cut debt. Repsol executives have said they're interested in acquiring oil assets in developed countries, and analysts expect the Spanish company to sell the Argentine government bonds relatively quickly to free up cash for possible deals.

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