Argentina Looks to Kick-Start Fracking
Has a deal with a Spanish oil company
Argentina said on Tuesday that a pending deal with Spanish oil major Repsol is aimed at kick-starting shale drilling in the South American country, putting an end to the long stand-off between energy investors and President Cristina Fernandez.
Nineteen months after seizing control of Argentina's main oil company YPF from Repsol, Fernandez's government announced a preliminary deal late on Monday to pay Repsol for its nationalized shares.
Shares of both companies soared on reports that the pact involved a proposal by Spain's government that Repsol receive $5 billion in compensation from the Argentine state for the 51 percent stake it grabbed in YPF last year.
The deal could set the stage for a radical increase in unconventional energy exploration and help repair a relationship with global investors left in tatters after Argentina's massive 2002 sovereign default.