Repsol shares fell by 6 percent yesterday in response to Monday's announcement that Argentine President Cristina Fernández de Kirchner intends to nationalize YPF SA, Argentina’s biggest oil and gas producer. With the government taking 51 percent stake in the company, Repsol's stake drops to only 6 percent of YPF SA. Repsol's value hit a 52-week low with prices dropping to 16.42 euros a share.

On Tuesday, both Repsol—a Spanish firm—and the European Union also denounced Argentina for not complying with international business accords. According to the EU High Representative for Foreign Affairs and Security Policy Catherine Ashton, the forced buyout “will create a negative environment for foreign investors.” Spanish Prime Minister Mariano Rajoy called it a "negative decision for everyone."Repsol, for its part, has vowed to "carry out all pertinent legal actions to preserve the value of all their assets."

Repsol has stated that if the Argentine government wanted to buy a majority stake at YPF, it would cost $9 billion—a notion rebuffed by Argentina, which prefers a valuation by an Argentine government agency. Argentine Vice Minister of the Economy Axel Kicillof also added that YPF would not be paying dividends in the coming years, instead reinvesting them into production.

The Argentine Senate is debating this week whether to allow the nationalization. The measure is expected to pass, as the upper house of congress is controlled by Fernández’ Frente para la Victoria (Front for Victory—FPV) party.