MADRID/BUENOS AIRES Argentine energy company YPF said on Wednesday that the government never made an official offer to compensate Spanish oil major Repsol (REP.MC) for last year's state seizure of YPF.
The statement from state-controlled YPF (YPFD.BA) came hours after Repsol's board of directors said it unanimously rejected a $5 billion noncash compensation offer from Argentina, saying the offer does not reflect Repsol's loss.
"It is not true that there has been an official offer from the Argentine government," said the statement, issued late on Wednesday. "It is however true that there were conversations between representatives of YPF and Repsol shareholders intended to bring both parties close to a deal."
The Argentine government took a controlling stake in YPF from Repsol in May 2012, claiming Repsol was underinvesting in the company, sparking a heated dispute with Spain and with Repsol's shareholders.
Repsol has launched several legal suits over a loss that it values at $10.5 billion. It has said it is open to an out-of-court settlement but wants fair compensation in the form of cash, bonds or liquid assets.
The earlier-reported proposal from Argentina included a 47 percent stake, estimated to be worth $3.5 billion, for Repsol in a joint venture to develop the country's vast Vaca Muerta shale assets. It was also said to offer Repsol $1.5 billion of capital that would have to be invested in the Vaca Muerta venture, the board said.
The offer would have given Mexico's Pemex PEMX.UL, which holds 9.2 percent of Repsol, a 2 percent stake in the Vaca Muerta joint venture.
"Following an exhaustive technical and economic internal analysis, supported by external specialist reports, the board of directors considered (the offer) unsatisfactory for the interests of the company," Repsol's board said in a statement.
However, it said it "welcomed" the Argentine government's willingness to negotiate a solution, but said any deal should follow "the appropriate corporate channels."
Repsol's shareholders - which aside from Pemex include Spanish lender La Caixa (CABK.MC), indebted builder Sacyr SVO.MC and Temasek Holding of Singapore - have been divided over sealing a deal on YPF.
La Caixa and Pemex have been orchestrating talks with Argentina in recent months, without the knowledge of Repsol executives, sources with knowledge of the matter said.
Giving Pemex a 2 percent stake in the joint venture was a commission for its role as an intermediary in the talks, the sources said. The involvement of Pemex, with an interest in getting a slice of the vast Vaca Muerta field, also puts pressure on Repsol, which has threatened to sue any foreign investor in the valuable shale assets.
The Argentine government has struggled to attract foreign investors in Vaca Muerta, which is estimated to need an annual $25 billion to be fully developed, because of Repsol's legal threats.
Analysts have questioned the wisdom of Repsol reinvesting in the country under the current legal framework. Argentine President Cristina Fernandez was re-elected in 2011 on promises of increasing her government's role in Latin America's No. 3 economy.
The Spanish company, whose shares and funding were hit by the loss of cash cow YPF, has largely bounced back from the Argentine seizure, posting strong earnings growth since the expropriation and resolving its financing needs.