MercoPress. South Atlantic News Agency

Spain concerned it might loose control of its flagship oil company Repsol

Industry minister Sebastian wants to ensure ‘Spanishness’

Spain’s government is concerned that the country’s hydrocarbons flagship Repsol-YPF could fall into foreign hands following the 30% voting block made up of Mexico’s Pemex and construction company Sacyr Vallehermoso.

The way to ensure Repsol’s “Spanishness” is for the majority of significant shareholders to be Spanish, as is the case now with Sacyr holding 20% and savings bank La Caixa 12.8%, Industry Ministry Miguel Sebastian said in an interview with Cadena Ser radio.

The minister said Pemex officials told him in a meeting to discuss the voting deal with Sacyr, (announced last August) that Mexicans had no interest in taking control of Repsol. Pemex holds 9.4% of Repsol stock.

“They gave me assurances that this operation would in no way put (the company’s) Spanishness at risk,” Sebastian said.

The industry minister said that in a market characterized by the free movement of capital the only way to guarantee Repsol’s “Spanishness” was to ensure that the majority of its significant shareholders are Spanish.

Sebastian stressed Repsol’s strategic importance for Spain and recalled that Pemex had held a roughly 5% stake in the company for decades and had supported the company’s management in that capacity.

The minister also added that Repsol has reached agreements with other companies, including Brazil’s Petrobras – “also state-run and foreign” – and that is fine “as long as the company’s Spanishness is not at risk.”

Pemex said in a report that the goal of its pact with Sacyr is to expand its operations globally via a greater presence in Repsol, getting a bigger say in the Spanish oil company’s management and gaining access to technology, production expertise, refining and marketing channels.

The partners’ combined stake in Repsol totals 29.4%, just short of the 30% threshold that would have required them to make a takeover bid for the oil major.

Spanish analysts say the Pemex-Sacyr pact is aimed at reducing the power of Repsol-YPF Chairman and CEO Antonio Brufau by forcing him to give up one of his two roles.

Sacyr has been at odds with Brufau’s management of Repsol and particularly his decision to give greater priority to oil exploration at the expense of higher dividend payouts to shareholders.