Shares in Repsol YPF plunged nearly 8 per cent on Thursday after the Spanish oil and gas group announced a 25 per cent cut in its proven reserves and warned of reduced profits this year.

The company partly blamed last year’s increase in production royalties from 18 per cent to 50 per cent in Bolivia, where it was forced to write off 659m barrels of oil equivalent (boe) of gas – half of its total there. However, it also admitted that “new information” about gas deposits in Bolivia and Argentina had forced it to reassess the probability of extraction.