Heat olive oil in a large skillet over medium heat. Add onion and garlic; cook and stir until onion is translucent, about 5 minutes. Add sherry and bay leaf; simmer until flavors combine, about 5 minutes. Add potatoes and cover skillet; simmer, stirring occasionally, until tender, about 20 minutes.
Reduce heat to low and discard bay leaf. Stir in green onions, parsley, and paprika. Season with salt and pepper. Remove from heat and cool to room temperature, about 30 minutes.
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