Spanish officials are up in arms to defend their nation’s oil and gas industry from an invasion by the Russians. Does that sound a little dramatic? Read on.
Last week, Spain’s Interior Minister said he would prefer that a company other than Russia’s Lukoil buy builder Sacyr Vallehermoso’s stake in Spanish oil group Repsol–and he didn’t mince words.
“If you ask me if there is another partner for Repsol I would prefer than Lukoil, I would definitely find one,” said Alfredo Perez Rubalcaba, speaking on Spanish radio station Onda Cero.
Isn’t it unusual for a country’s interior minister to be consulted on such a deal? In our experience, interior ministers are usually concerned with matters of national security.
If so, then you can see the kind of concern generated in Spain over the desire of Lukoil to buy into Repsol. The purchase is perceived–in some sense or another–as a threat to national security.
Security threatened
Urgency was also suggested by Spanish Industry Minister Miguel Sebastian, who said Madrid would do everything it can to keep Repsol “independent and in Spanish hands.”
Sebastian said at a conference that Repsol is “key and strategic” for Spain’s energy supply. So, there you have it: the question of national security and the reason for involvement by the country’s interior minister.
The two ministers’ comments came after Spanish state media reported that Repsol’s main shareholder Sacyr Vallehermoso SA was in talks to sell its 20% stake to Lukoil or another company.
But the plot thickened when it was learned that Lukoil also was in talks with Repsol’s No. 2 stakeholder Criteria CaixaCorp SA, the investment arm of Spanish savings bank La Caixa, said people close to the situation.
Lukoil could own Repsol
Criteria has a 9.1% direct stake in Repsol, and about another 5% via the investment vehicle Repinves set up by La Caixa and savings bank Caixa Catalunya. In a word, Lukoil was poised to buy as much as 34.1% of Repsol.
That percentage–or anything around 30%–brought cries of concern when it was reported that under Spanish takeover law, a shareholder must launch an offer for the whole company once it passes the 30% threshold.
The main opposition Popular Party (PP), which privatized Repsol in 1997 when it was in office, stepped up its attacks on the government, accusing it of entrusting Spain’s strategic interests to a Russian firm with close ties to the Kremlin.
“No European Union country would allow a company with these characteristics to gain control of a strategic sector of their country,” said PP Sec.-Gen. Maria Dolores de Cospedal.
Allowing Lukoil to own a majority stake in Repsol would be a “terrible mistake” she said, expressing deep concern that “important decisions like the supply of electricity, oil, and gas would depend on foreign governments, in this case Moscow.”
