The board of Repsol’s Argentine subsidiary YPF has proposed to use its earnings to pay out a stock dividend that will amount to a capital increase.

In a filing with Spanish market regulator CNMV, the oil and gas company said that it will increase capital by 5.78bn Argentinean pesos through the issuance of a stock dividend.

The proposal reflects the commitment by YPF shareholders to maintain the high level of investment realised in Argentina in recent years, Repsol said in a statement.

The company insisted that the decision would not affect its development plans nor its dividend policy thanks to its strong financial position.

YPF opted to pay out its dividend in shares instead of cash in order to avoid potential scrutiny from the Argentinean government. However, it may also be looking to protect itself from government intervention by searching for potential partners to help fund investments in the country.

According to Spanish daily Expansion, the Spanish company may be looking to partner with Chinese, US, or European companies in order to invest in the ‘Vaca Muerte’ shale.

S.C.