The Argentine government is preparing to offer $1.5 billion in cash to Spanish oil company Repsol in compensation for the 2012 nationalization of Argentina's main energy company, YPF, the newspaper La Nacion reported.
Considering the payment would be only a fraction of the $10.5 billion that Repsol is seeking, La Nacion said the offer is likely to be rejected and could raise tensions between the two countries.
YPF declined to comment on the La Nacion report.
Argentine President Cristina Fernandez seized Repsol's majority stake in YPF in May 2012, accusing the Spanish group of insufficient investment in the unit.
Repsol denied the accusation and filed lawsuits against Argentina for a loss of $10.5 billion.
Repsol says Argentina seized YPF to control the Vaca Muerta shale oil and gas formation in Patagonia, considered one of the largest in the Western Hemisphere.
