Repsol US$ 5 Billion Settlement in Argentina’s YPF Nationalization

Compass Lexecon was retained by counsel for Repsol to assist in quantifying damages in its ICSID arbitration claim due to the 2012 nationalization of its majority (51%) equity investments in Argentina.

Repsol had controlling investments in the largest integrated Argentine oil and gas company, YPF S.A., as well as in the LPG distribution Repsol YPF Gas S.A. The damages assessment involved the application of several valuation methodologies to determine the fair market value of the integrated oil and gas business in Argentina, as well as other damages due to the complex ownership structure and shareholder agreements.

The assessment of YPF’s business included upstream exploration blocks (containing the shale-oil and shale-gas developments of Vaca Muerta and others), oil and gas production activities, transportation and pipeline operations, refineries and refined products, industrial and agricultural chemicals and consumer products. As part of the tasks, the Compass Lexecon team developed supply and demand equilibrium frameworks in the context of both regulated and unregulated prices on wellhead oil and gas markets, as well as on downstream petrochemical products

The case was registered under ICSID in 2012, and was successfully settled with Argentina’s payout of US$ 5 billion in April 2014.

Compass Lexecon’s experts Manuel A. Abdala and Pablo T. Spiller led this engagement supported by a team in Compass Lexecon’s New York, Washington DC, and Madrid offices which included Santiago Dellepiane, Anton García, Alex Rinaudo, Carina Chambarry, Mark Sheiness, Erica Hoffmaster, Anna Campos Marine, Nancy Cherashore and Rachel Marx.  The team worked closely with Nigel Blackaby, Lluis Paradell, and Gustavo Topalian of Freshfields Bruckhaus Deringer LLP (Washington DC); Hector Mairal of Marval O’Farrell & Mairal (Buenos Aires); and Miguel Virgós, and Candido Paz Ares of Uría Menéndez (Madrid), who represented Repsol.