18 Apr 2012

Spain and Argentina at loggerheads over oil firm

2:26 pm on 18 April 2012

Spain is embroiled in a financial and political spat with Argentina over plans to nationalise an oil company.

The Argentine government has put forward a bill that would allow it to take a controlling stake in YPF, in which Spanish energy giant Repsol has a majority stake.

Repsol has said it will demand compensation of up to $US10 billion for its 57% share in the company.

Shares in Repsol have plunged and executive chairman Antonio Brufau told reporters that the act will "not remain unpunished."

European Union foreign policy chief Catherine Ashton said Argentina's decision sent a "very negative signal" to investors.