The European Commission is working with Spain on what steps to take in response to Argentina's dramatic and possibly illegal move to nationalize the country's former state oil company, which is now a unit of Spain's Repsol YPF SA (REP.MC).

Earlier Tuesday, Jose Manuel Barroso, president of the commission, said earlier that he is "seriously concerned" about Argentina 's decision.

Speaking later, a spokeswoman said: "The commission is studying the draft measure to determine, in close contact with the Spanish authorities, the next step and in doing so analyzing all the possible options which are available.

"The expropriation which is envisaged here is illegal when it takes place without fair, adequate and prompt compensation," the spokeswoman said, adding that the EU has already decided to postpone a meeting with Argentina scheduled for Thursday and Friday.

Argentina 's President Cristina Kirchner announced Monday that her government will ask Congress to put 51% of YPF SA (YPF), Argentina 's biggest oil company, in state hands, ousting Repsol YPF as majority shareholder.

Repsol's stake in YPF is currently 57%. Argentina 's federal and provincial governments would take 51% of YPF from Repsol, leaving it with a 6% stake.

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