Argentina reaches YPF compensation deal with Repsol

Argentine President Cristina Fernandez said the YPF nationalisation was justified

Argentina has reached an agreement in principle to compensate Spain's Repsol for the nationalisation of energy firm YPF.

Argentina seized YPF last year without paying anything. The Spanish company had been demanding $10.5bn (£6.5bn) in compensation.

In Buenos Aires, Repsol, YPF and Mexico's Pemex, which holds a stake in Repsol, said they had reached a process for determining compensation.

No other details were released.

The agreement must be ratified by Repsol during a board meeting on Wednesday.

YPF produces about a third of Argentina's oil and a quarter of its gas.

Argentina has some of the world's largest reserves of shale oil and gas.

The authorities in Argentina had accused YPF of not investing enough to increase output from its oil fields. Repsol replied that it had invested $20bn in the country.

Repsol and the investment firm Texas Yale Capital Corp sued Argentina and demanded that it makes an offer for the YPF stake.

The European Union also had filed a suit against Argentina's import restrictions at the World Trade Organization.