The Argentine government and Spain's Repsol reached a tentative agreement Monday on compensation for the Spanish oil major's controlling stake in Argentina's YPF, which Buenos Aires nationalized in April 2012.

The accord "will imply setting the amount of the compensation and its payment with liquid assets," the Argentine Economy Ministry said in a statement.

The prospective deal is subject to approval by Repsol's board, set to meet Wednesday.

Besides addressing the compensation mechanism, the text mandates that the parties desist from further litigation.

Monday's talks in Buenos Aires were chaired by Argentine Cabinet chief Jorge Capitanich and Spain's minister of Industry, Energy and Tourism, Jose Manuel Soria.

Other participants included YPF's CEO; three Repsol senior executives; a representative of Repsol chief shareholder Caixabank; Argentine Economy Minister Axel Kicillof and the head of Mexican state oil company Pemex, which has a 9.3 percent stake in the Spanish firm.

The impetus for the discussions came from the governments of Argentina, Spain and Mexico.

"The parties agree that the present preliminary accord contributes to normalizing and strengthening the historic ties among the three countries and their companies," the Argentine Economy Ministry said.

The Argentine government seized control of YPF in May 2012, expropriating the bulk of Repsol's stake while leaving the Spanish company with around 12 percent of the shares.

President Cristina Fernandez's administration accused the Spanish company of using YPF as a cash cow to fund its international expansion.

The World Bank's International Center for Settlement of Investment Disputes agreed last December to hear Repsol's complaint against the expropriation.

The Spanish company also has taken legal action against the nationalization in courts in Argentina, Spain and the United States.

Repsol has been seeking $10.5 billion in compensation from the Argentine government. EFE