Repsol released a statement promising to protect the interests of its shareholders. It called the move "unlawful and gravely discriminatory."
Spanish officials had earlier protested the plan, saying Argentina risks becoming "an international pariah" if it takes control of Repsol' subsidiary, Repsol YPF SA
Spain's foreign minister last week summoned Argentine Ambassador Carlo Antonio Bettini to convey concern over possible nationalization of YPF, which represents 42 percent of Repsol's total reserves, estimated at 2.1 billion barrels of crude.
Mexico's Economy Minister Bruno Ferrari said in recent days that Spain had requested that Mexico intervene in the row with Argentina over Repsol-YPF SA. But Ferrari said Mexico's role in the dispute is still to be determined.
"We will hold talks with Spain over the next days to exactly determine what Mexico can do," he said ahead of the World Economic Forum on Latin America 2012 that will be held in the coastal city of Puerto Vallarta.
At the forum on Monday, Mexican President Felipe Calderon criticized Argentina's move, calling it "not very responsible and not very rational."
In contrast, Venezuela's foreign ministry issued a statement voicing support for Fernandez's decision to renationalize YPF. Venezuela's state oil company also supported the Argentine decision and said it is willing to help strengthen Argentina's oil industry,
"Venezuela puts all its technical, operational, legal and political experience of Petroleos de Venezuela at the disposition of the government of Argentina and its people to strenthen the state oil sector," the foreign ministry said.
Governors of oil-producing Argentine provinces have withdrawn about 15 oil leases, representing 18 percent of YPF's crude production, alleging the company failed to keep its promises to develop them. YPF has countered that it has invested millions in those areas and plans to increase production, but Argentine officials have said that still falls short.
How Argentina may try to displace Repsol has been the subject of wide speculation since the government's pressure campaign began in February.
The president's proposal would leave Repsol with just a little more than 6 percent of YPF's shares.
Fernandez put Federal Planning Minister Julio de Vido and Economics Vice Minister Axel Kicillof in charge of handling the expropriation.
The president's proposal declares that the exploration and exploitation of hydrocarbons is "of national public interest" and declares that building up the nation's supply is a priority.
Associated Press writers Luis Andres Henao in Buenos Aires and Jorge Sainz in Madrid contributed to this report.