Spain’s main oil corporation Repsol warned it could take legal action against companies that invest in YPF after Argentina seized control of the Spanish company's energy unit last week.
The government of President Cristina Fernandez expropriated the 51% of YPF owned by Repsol, saying that the company needed to invest more to address Argentina’s energy shortage.
Argentine Planning Minister Julio De Vido approached Brazil's state-run oil company Petrobras over investment in YPF last week. Argentine officials met executives from ConocoPhillips earlier on Monday to discuss potential investments, a Planning Ministry statement said.
De Vido said last week he would make contact with foreign oil companies, such as ConocoPhillips, Exxon, and Chevron to seek to attract more investment in oil. Chinese oil companies are also known to be interested in YPF.
Repsol reserves the right to take legal action against companies' investment in YPF, a Repsol spokesman said on Monday.
Argentina needs hefty foreign investment to help develop its shale gas reserves, the third largest in the world.
European, US and Mexican officials have all criticized Argentina's expropriation of YPF, the country's biggest oil company, but the effects of retaliation may be limited as Argentina in the past has failed to pay settlements stemming from international trade disputes.
The only concrete measure Spain has taken so far was to curtail multimillion-dollar imports of bio-diesel from the Latin American nation.
In Luxembourg, Spanish Foreign Minister Jose Manuel Garcia-Margallo met his European Union counterparts on Monday and discussed potential measures against Argentina, which has said it will not pay Repsol the full price for YPF.
The minister said he had discussed measures such as ending trade benefits to Argentina and had received support from his counterparts.
However, Margallo said the government wanted to negotiate with Argentina's government. We keep saying that the best thing that could happen is for us to reach a negotiated solution...and we have asked some of our European and Latin American partners to act as intermediaries in this matter to avoid a dispute, a clash which is bad for Spain, Argentina and Europe, he said.
The European Parliament on Friday urged the executive European Commission to consider reprisals against Argentina, although it would need backing from European Union countries and the World Trade Organisation to do so.
No swift action by the EU against Argentina is expected, as Europe's trade ministers would also have to consider any proposals and, ultimately, it would be up to the European Commission to decide on sanctions.
Karel De Gucht, the European Union's trade commissioner, wrote to Argentina last week to express the bloc's serious concerns about the overall business and investment climate in Argentina, singling out the YPF takeover and import curbs for criticism.
The EU keeps open all possible options to address this matter, his letter read.