A showdown over control of an oil company is pitting Argentina against its former colonial ruler, Spain. The bone of contention is an Argentinian company that the government may seize from Spanish oil major Repsol.

The Spanish company is being accused by Argentinian President Cristina Fernandez's government of not reinvesting enough money into developing the nation's oil supplies, while paying out too much in profits, reported the Associated Press.

Repsol reported a net income of 2.193 billion euros in 2011, a more than 50 percent drop from the year before, the company said.

Fernandez has previously announced her government will do whatever it can to promote and develop local energy resources. But the president hasn't explicitly mentioned if her government intends to wrest YPF, majority-owned by Repsol, from Spanish control.

Madrid has warned Argentina that if it seizes the company, Spain will view it as an act of aggression, the AP reported.

Spain's Foreign minister has called a meeting with the Argentinian ambassador seeking clarification on Argentina's intention.

Government officials have considered nationalizing YPF since February.

Repsol owns 57 percent of YPF, but under a proposed Argentine law, 50.1 percent of the company could be deemed a public good and thus subject to government control, the AP reported.

Eduardo Fellner, the governor of Argentina's Jujuy province, however, said that no such law was being drafted. Everything is under review, Fellner said, according to Bloomberg News, following a meeting he and other governors from oil-producing regions had Thursday with President Fernandez. There is no legal proposal yet, there are just press rumors.

Argentina in recent years has experienced a rush of energy development, as large deposits of shale oil were found in Patagonia.

YPF announced last year it had discovered, and will start developing, a 150 million-barrel oil field. The U.S. Geological Survey reports there could be as much as 3.6 billion barrels of oil yet to be found in Argentina, though much of the country remains unassessed.

Repsol is also active in oil exploration in Brazil, Venezuela and most recently, off the coast of Cuba.