- POSTED: 04 Jun 2014 17:47
Mexico's state-owned Pemex on Wednesday sold a 7.86 per cent stake in Spanish oil giant Repsol for 2.092 billion euros ($2.848 billion), Repsol said, putting an end to an increasingly fractious relationship between the two firms.
MADRID: Mexico's state-owned Pemex on Wednesday sold a 7.86 per cent stake in Spanish oil giant Repsol for 2.092 billion euros ($2.848 billion), Repsol said, putting an end to an increasingly fractious relationship between the two firms.
The sale of the shares, which represents most of Pemex's 9.3-per cent Repsol holding, follows months of tension between the two oil companies over the Spanish group's handling of a conflict with Argentina.
Pemex announced late on Tuesday that it would sell the stake, with investment banks Citigroup Global Markets and Deutsche Bank handling the deal.
The shares had a value of 2.2 billion euros at the close of trading on Tuesday.
Madrid's stock market briefly suspended trading in Repsol on Wednesday.
Shares in Repsol fell 4.03 per cent to 20.025 euros shortly after trading in the stock was resumed. The Ibex-35 index of most traded Spanish shares fell 0.55 per cent.
Pemex chief executive Emilio Lozoya had strongly criticised how Repsol reacted to Argentina's move to seize and nationalise Repsol's 51-per cent owned unit YPF.
Repsol announced May 23 it had exited Argentina, pocketing $6.3 billion in compensation and asset sales after Buenos Aires' takeover of YPF.
The news marked the final chapter of a bitter row sparked in April 2012 when Argentina's President Cristina Kirchner ordered the nationalisation of Repsol's 51-per cent-owned YPF unit.
Repsol said it had earned $5 billion from the sale of Argentine government bonds, which had been paid by Buenos Aires in compensation over the seizure of YPF.
Buenos Aires' seizure of the YPF operations forced Repsol to make provisions of 1.28 billion euros in 2013 and sent its profits for that year plunging by 90 per cent.
For YPF, settlement of the dispute with Repsol could remove legal questions over its assets, helping to lure foreign investment to the vast Vaca Muerta shale oil and gas field in Argentina, which YPF discovered in 2010.
The Vaca Muerta find is estimated to contain the equivalent of 22.8 billion barrels of oil, described by Repsol at the time as the biggest discovery in its history.
Pemex's stake sale comes just as Mexican President Enrique Pena Nieto is due to make his first official visit to Spain on June 9-10.
The Mexican group has been a Repsol shareholder ever since the Spanish group's initial stock market flotation in 1989.