Spain shocked by Russian move to buy stake in its energy giant Repsol

Spain responded with shock bordering on panic yesterday to the suggestion made in Madrid by Russia's deputy prime minister that Gazprom might buy a stake in the energy conglomerate Repsol YPF.

Alexander Zhukov caught Spain's Industry Minister, Miguel Sebastian, on the hop when he announced in a joint press conference late on Wednesday that the Russian state monopoly was interested in buying 20 per cent of the Spanish-Argentine firm Repsol YPF currently up for sale. "Gazprom is studying at the moment the possibility of buying 20 per cent of Repsol that has been put up for sale," Mr Zhukov said.

Mr Sebastian, clearly wrong-footed, said this was the "first time he'd heard the news". However, the debt-laden construction company Sacyr Vallehermoso, which owns the Repsol stake that is up for sale, said yesterday that it had been in talks with Russian and other possible buyers for months, although "no agreement had been reached".

"The idea of privatising Spanish companies and them being bought by state-run firms goes against the grain," the Finance Minister Pedro Solbes said. "It's an enormously delicate matter."

Spain's Prime Minister, Jose Luis Rodriguez Zapatero, took no official view, apparently considering the matter a purely business operation. "The government considers it only a declaration of intent, and in any case an operation between companies that the government does not evaluate," sources told Europa Press agency.

The conservative opposition leader, Mariano Rajoy, was more forthright. He "radically opposed" the possible sale. "I hope it doesn't even cross the government's mind to give it the green light," he said.

For conservative Spanish business circles, it is unthinkable for a privately owned Spanish company to become part of a state monopoly controlled – and used as a political lever – by Moscow. This was, commentators said, exactly the sort of Russian incursion against which the EU has been trying to barricade European gas and electricity networks.

Repsol shares rose slightly after the news, however, and the company said any decision was a matter for shareholders. The Russian move has a business and strategic logic, advancing Moscow's aim to control energy supply and distribution first in Spain, with its gas and oil pipelines from the Maghreb, then Portugal and throughout southern Europe.Establishing a presence in Repsol would also consolidate Russian influence in liquid natural gas, which Spain has developed to a high level with supplies from Algeria.

Gazprom's move was announced shortly before new proposals, unveiled by the European Union yesterday, to build pipelines from the bloc to Azerbaijan and Turkmenistan. The plan is aimed at reducing EU reliance on Russian resources