Repsol rejects Argentina settlement over seizure of YPF Repsol's board has rejected a settlement with Argentina over last year's expropriation of its YPF unit proposed by one of the Spanish oil group's largest shareholders. The move raises the prospect of a further deterioration in relations between its management and some of its biggest investors. Repsol's board met on Wednesday evening to consider a proposal brokered by its third-largest shareholder, Mexican state oil group Pemex, to abandon a €10.5bn compensation claim against Argentina in return for forming a new joint venture in the country - a deal Repsol management believes is unacceptable. Argentina's government expropriated 51 per cent of YPF, its former state oil company, from Repsol last year, accusing the Spanish company of having failed to invest enough in developing the country's energy assets - an allegation denied by Repsol. Repsol has since experienced tensions with its largest shareholder Caixabank over reaching a settlement with Argentina. Relations between Repsol management and Pemex, which holds a seat on the Repsol board, have also deteriorated since the Mexican company came under new management following the country's elections. The Pemex offer was first presented to Antonio Brufau, Repsol executive chairman, two weeks ago at an informal meeting between him and his largest investors in Barcelona. The offer also enjoyed tacit support from Caixabank, the Catalan lender which holds a 12.2 per cent stake in Repsol. At the Wednesday board meeting Isidro Fainé, president of Caixabank and vice-chairman of Repsol, which had declined to comment officially on its position, did not attend, people familiar with the meeting said. This meant that the lender's chief executive Juan María Nin, who also sits on the oil group's board, was its sole representative. Mr Fainé had earlier this year travelled to Argentina to broker a deal with Argentina's president Cristina Fernández which was rejected by the Repsol board. Following the seizure of YPF, Repsol saw its share price tumble and was forced to offload assets to stave off a credit-rating downgrade. Mr Brufau has said he will only accept compensation that involves cash, and a fair value for the assets that were seized, which included rights to the vast Vaca Muerta shale formation seen as one of the most promising in the world. One of the conditions demanded by Argentina's government is that Mr Brufau must leave Repsol before any settlement is drawn up. Buenos Aires is keen to take advantage of a planned September visit by Mariano Rajoy, Spain's prime minister, to strike a deal. Senior figures within the Spanish government said that they are keen to see an agreement, but only one that provides Repsol with fair value for YPF. Analysts reacted negatively to news of the leaked offer earlier this week, with several arguing that the terms, published in the Financial Times, overvalued Argentine assets and would force Repsol back into investing in the country. The offer "makes little economic or strategic sense, in our view," wrote analysts from UBS. Moreover, the implied value Argentina is placing on the shale is extremely high, hence is unlikely to be accepted. Other analysts have raised concerns over signs of renewed tensions between Repsol's management team and its largest shareholders. "Equally worrying is the apparently renewed interference of Repsol's large shareholders," wrote analysts at Société Générale.