Several months ago elEconomista reported that Repsol should not only collect the crumbs left by the Argentine government when it appropriated YPF holdings, but that it also had to continue to battle in the courts. That is what has happened, and a year and seven months after the expropriation, Repsol has finalized its claim with the World Bank's arbitration court. The oil company will ask for 15 billion euros.
This amount, very far from the 5 billion that Argentine leader Cristina Fernández de Kirchner offered initially, will include the company's control premium (the amount that a buyer is usually willing to pay over the current market price of a publicly traded company) for an expropriation of 51% of the value of the enormous Vaca Muerta oil holding. Even though Repsol has proved ready to negotiate a settlement, Argentina continues to make ridiculous, and in some cases threatening, proposals.
A supposed arbitrage from Argentina's Court of Appraisals is inacceptable considering that it clearly takes advantage of Repsol. The oil compay has rejected it, and rightfully so, not only because the court valued the holdings at a laughably low 1.5 billion euros, but also because accepting this lowball proposal would mean accepting a decision from a ruling-party court that is obviously a judicial extension of President Kirchner.
The court depends on the Ministry of Planning directed by Julio Vido, who orchestrated the expropriation. It is doubtful whether he is neutral. Brufau has been smart to oppose the valuation, because it was done by a government agency whose five members were appointed by the President. Obviously, this ordeal is a train wreck. But Repsol should not have to pay the price for a corrupt Latin American government's shady business practices.