DOW JONES NEWSWIRES

MADRID -(Dow Jones)- A mixture of falling oil prices, exposure to Argentina and the weakness of one of its major stakeholders proved a poisonous mix for Spanish oil company Repsol-YPF (REP) Wednesday.

Repsol shares plunged 15.8% to close Wednesday at EUR15.08, while the Ibex-35 index closed down 8.2%.

Repsol shares suffered from falling oil futures prices, which declined nearly 6% to $67.92 a barrel at the New York Mercantile Exchange at 1540 GMT Wednesday.

Repsol shares also were hit due to a decision by Argentina's government to nationalize the private pension system in the country. The move led to fears Argentina could default on its debt for a second time in a decade, or even consider nationalizations of other sectors, such as oil.

A possibly default, even if not very likely, could lead to a steep devaluation of Argentina's peso, which subsequently would affect the peso-denominated downstream business of Repsol's Argentine unit YPF, said Juan Rodriguez Rey, a trader at Ibersecurities in Madrid.

Operating profit at YPF in the first half of this year was EUR644 million, or 18% of Repsol's overall operating profit.

That makes the exposure of Repsol to Argentina greater than that of any other Spanish company, Banca March analyst Ofelia Marin-Lozano said in a report.

A Repsol spokesman in Madrid said the share-price fall wasn't justified and that there was "no objective reason for the behavior of the stock."

"Repsol remains vigilant to identify the source and spread of speculative rumors," the company spokesman said.

Repsol's share price also was influenced by persistent rumors that debt-laden construction company Sacyr-Vallehermoso (SYV.MC) may need to sell its 20% stake in Repsol.

Sacyr in September said it was considering selling its stake in Repsol or other companies.

Spain's third-largest builder by market value purchased its Repsol stake in 2006 for about EUR6.55 billion, or EUR26 a share, seeking to diversify out of Spain's slowing real estate market. The debt servicing commitments it took on have weighed on its shares, and the market value of Sacyr's Repsol stake has slipped to EUR3.7 billion.

Sacyr first used Repsol shares as collateral for a EUR5.17 billion syndicated loan to finance the stake acquisition.

Sacyr also agreed to provide additional collateral if Repsol's shares were to fall under certain loan-to-value ratios. With Repsol shares in a free fall, some market observers have said they believe Sacyr may be forced to sell its Repsol stake soon.

Alternatively, banks could demand part of the stake as repossession, a Madrid- based trader said.

Sacyr shares fell 8.1% to close at EUR8.01.

Company Web site: http://www.repsol.com