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Concern in Spain over Russian control of oil firm

Business Materials 20 November 2008 18:34 (UTC +04:00)

Spain's opposition Thursday expressed concern over the possibility of the oil and gas company Repsol YPF coming partly under Russian control, reported dpa.

Companies from outside the European Union should not get involved with strategic sectors in Spain, Cristobal Montoro of the conservative People's Party (PP) said amid reports that the Russian oil giant Lukoil was planning to swoop for just under 30 per cent of Repsol's stock.

The Socialist government "understands that it is good" for Repsol to remain Spanish, but it also needed to heed the company's interests, Prime Minister Jose Luis Rodriguez Zapatero said.

Lukoil was a private company whose main shareholder was from the United States, as opposed to the Russian state company Gazprom, which had also been reported to be interested in Repsol, Zapatero pointed out.

Gazprom has denied such reports.

Zapatero pledged that the government would seek "a result favourable to Spain's strategic interests" and to Repsol.

Spanish national radio earlier reported that Lukoil was targeting a stake of nearly 30 per cent in Repsol, including a 20-per-cent stake held by the construction company Sacyr Vallehermoso, which has been hit by Spain's construction crisis.

A Sacyr spokesperson referred to a document sent last week to the stock market watchdog CNMV which the company declared that talks about the sale of its stake in Repsol with potential buyers were taking place.

Sacyr and Lukoil had been in talks since September, but there was no firm agreement so far, the daily El Mundo quoted unnamed sources as saying.

Criteria, a holding company of La Caixa bank, meanwhile admitted that it had maintained "informal contacts" with an unidentified party about the possibility of selling all or part of its 12.5 per cent stake in Repsol.

There was, however, no concrete offer, Criteria told CNMV.

National radio reports put the cost of a 30-per-cent-stake in Repsol at about 9 billion euros (11.3 billion dollars).

Acquiring more than 30 per cent would force Lukoil to launch a takeover bid for Repsol, according to Spanish media.

Opposition parties and trade union representatives criticized the possibility of Lukoil taking a stake in Repsol.

Another major Spanish energy company, Endesa, had already passed under Italian control, complained Josep Sanchez Llibre of the Catalan regionalist formation CiU.

A stake of nearly 30 per cent would make Lukoil Repsol's biggest shareholder, but would not necessarily give it control of the company, where voting rights of individual shareholders are currently limited to 10 per cent.

The shares of Sacyr Vallehermoso and Repsol went up by 4.92 and 2.08 per cent respectively by midday.

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