Spanish oil company, Repsol, has agreed to receive $5 billion in compensation from Argentina.
Argentina seized Repsol’s assets in Argentina by nationalising its stake in Argentina’s biggest oil company, YPF.
The move in 2012 deprived Repsol of nearly half of its annual oil production.
Repsol demanded $10.5 billion in compensation, but welcomed the agreed $5 billion saying it would bring an end to legal uncertainty. Its chairman said it was extremely positive “to reach a friendly agreement on this contentious issue” in the space of two years.
"As far as we are concerned, from a financial point of view, we have started a new chapter where we are stronger," he said.
The agreement could also help Argentina attract foreign investment in order to explore its shale oil and gas reserves, said to be among the world’s biggest.
Nevertheless, the YPF president said that "YPF is a fundamental tool for the country's energy future and I believe the expropriation has given that tool back to Argentines."
The agreement must still receive approval from Argentina’s parliament and by Repsol's shareholders.
