Argentina's threat to seize control of Spanish subsidiary Repsol-YPF oil firm is taking a heavy toll on investor nerves but also forcing Madrid to attempt extreme diplomacy -- getting King Juan Carlos to call Argentine President Cristina Fernandez de Kirchner.

News of the king's intervention, revealed by senior diplomats, heightened fears Argentina's nationalization plans for Repsol-YPF could be serious enough to warrant the monarch's telephone conversations with the president.

Results of the conversations -- two so far, Spanish officials said -- went unreported, and there was no Argentine reaction to Madrid's accusations Buenos Aires was conducting a media campaign against Repsol-YPF in the style of its Falklands war of words on Britain.

Argentina wants Repsol-YPF to invest more of its profits into finding new oil and natural gas in Argentina. Spanish government officials and Repsol executives are unhappy the government chose a media war over negotiation.

Argentine officials accused Repsol-YPF of tax violations and other irregularities, which the company denies. Argentina's pro-government media openly called for a renationalization of Repsol-YPF, a former monopoly now 57.4 percent owned by the Repsol group.

Spain's Foreign Secretary Manuel Garcia Margallo said "not one moment goes by with this government not being concerned over Repsol-YPF." However, he said, Spain prefers negotiation over public rows.

"The king is also helping us to put the fire off," he said, referring to the two telephone conversations.

Following the reported phone conversations, some of the much anticipated government plans for Repsol-YPF didn't figure in recent comments by Fernandez, including her address to Congress, but it wasn't clear if the government had shelved plans to take over the company.

Investors' representatives said the government initiative was ill-timed and likely to frighten away new investment. In addition to the media campaign against Repsol-YPF, government-backed news outlets have also fanned sentiment against other energy companies active in the provinces.

Oil industry leaders deny they are to blame for Argentina's energy deficit. Fuel imports claimed nearly $10 billion of Argentina's export revenues but industry sources say the government's unpredictable policies and frequent changes to the legal environment have discouraged the companies.

In several oil producing provinces, regional authorities have followed Buenos Aires' example and begun making new demands on the oil companies active in those areas. Charges of partial implementation of contracts and missed tax payments have raised fears other oil companies may also be targeted for renationalization.

Tensions over the fate of Repsol-YPF sidelined Argentina's major discovery of shale oil and gas, estimated to exceed 22 billion barrels equivalent. Anxiety over Argentina's intentions hit Repsol shares, slicing up to 13.5 percent off their value since the start of the year.