MADRID — The board of Spanish energy giant Repsol on Wednesday rejected a $5 billion offer of compensation from Argentina for the company's YPF unit that the country seized last year.
Repsol SA said in a statement that the offer isn't good enough for what it lost. Argentina expropriated YPF after accusing the Spanish company of bleeding YPF dry and forcing Argentina to import record amounts of energy when it failed to invest in its operations in the South American country.
Repsol's board said, however, that it was encouraged that Argentina is interested in a negotiated solution to the dispute.
The deal would have given Repsol a 47 percent stake in a joint venture involving the vast nonconventional oil and gas reserves in the Vaca Muerta area of Patagonia. YPF would have held 51 percent and Mexico's Pemex would have gotten 2 percent.
In a statement released later on Wednesday, YPF denied that an official offer by Argentina's government had been made and said that talks have been held between the companies.
"YPF informs that it is not true that there was an offer by the Argentine government over the nationalization of the company," the statement said.
"It is true that there were conversations between YPF representatives and Repsol shareholders with the intention on bringing the two parts together towards an agreement."
YPF also praised, "Repsol's attitude of being open to dialogue to reach a negotiated solution that is satisfactory to the interests of both companies."
Repsol has sued in Spain, Argentina and at the World Bank's International Center for the Settlement of Investment Disputes, seeking more than $10 billion in compensation for the controlling stake in YPF that President Cristina Fernandez seized in May 2012.
Vaca Muerta" or "Dead Cow" reserve that has given Argentina the world's third-largest shale potential behind the U.S. and China.
YPF needs billions of dollars to go after the unconventional oil and natural gas, but major oil companies have held back from investing. Repsol's threat to sue any company that steps forward is one major disincentive; another has been Argentina's elaborate system of keeping consumer energy prices far below international market rates.
Associated Press writer Debora Rey in Buenos Aires, Argentina contributed to this report.