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| "Even before the crisis, Repsol didn’t anticipate a need for financing from the markets – and I certainly couldn’t contemplate turning to the markets now"
Antonio Brufau, Repsol |
SPAIN’S ECONOMY HAS been transformed in the past decade as a result of liberalization, globalization, a surging real estate sector and a massive credit boom. Inevitably, the good times – as elsewhere in Europe – have come to an end. Debt defaults rose 203% in Spain in the third quarter of 2008 compared with a year earlier, according to Spain’s Official State Bulletin, and the European Commission said that it expected Spain to enter its first recession in 15 years by the year-end. The recent history of oil company Repsol YPF, one of the world’s 10 largest privately owned energy firms, mirrors many of the developments in the Spanish economy. The government began privatizing Repsol in 1989 and sold its final stake in 1997. The company, eager to expand its international reach, bought Argentina’s YPF in 1999 – just before the Argentine economic crisis. The fallout from the episode has had profound implications for how Repsol YPF considers risk.