ARGENTINA: Overwhelming majority of Argentine lawmakers vote to expropriate YPF from Spain's Repsol

Record ID: 327766

  • Title: ARGENTINA: Overwhelming majority of Argentine lawmakers vote to expropriate YPF from Spain's Repsol
  • Date: 27th April 2012
  • Summary: BUENOS AIRES, ARGENTINA (APRIL 25, 2012) (REUTERS) GENERAL VIEW OF EXTERIOR OF CONGRESS AND YPF FLAGS
  • Embargoed: 12th May 2012 13:00
  • Keywords:
  • Location: Argentina, Argentina
  • Country: Argentina
  • Topics: Business,Politics
  • Reuters ID: LVA6GRN8F9NDGCH3G2255J11GORK
  • Story Text: Argentina's Senate approved the expropriation of the country's biggest oil company late on Wednesday (April 25), underscoring broad domestic support for a move that has nonetheless sparked outrage among foreign investors.
    President Cristina Fernandez, who controls both houses of Congress, unveiled plans last week to seize a 51 percent stake of YPF from Spain's Repsol. She accuses the company of under-investing and under-producing in Argentina, a charge that Repsol dismisses.
    Most Argentines support the move to re-nationalise YPF, which was privatized in the 1990s after 70 years under full state control. Many blame the privatization and other free-market reforms of that decade for provoking Argentina's 2001/02 financial meltdown.
    The vote on the YPF take-over bill started late Wednesday night and ended early Thursday morning with 63 in favour, three against and four abstentions.
    Opposition Senator Luiz Juez, in favour of the expropriation highlighted the country's lack of a serious energy plan with his vote.
    "This is an opportunity and this opportunity could put me in a very comfortable position but no, I want to support this decision but with the warning: It has been nine years that we have been warning that Argentina does not have a serious energy plan,"
    Abstaining opposition Senator Maria Eugenia Estenssors suggested a meticulous review of the action.
    "Approving this project of the YPF expropriation without meticulously reviewing the actions by members of this government, in my judgement, implicates the sharing of political and administrative responsibilities and it could also include the penal issues of some of the various government officials in the loss of the national energy reserves and YPF's assets," she said.
    In an advertisement in Argentine newspapers on Wednesday, Repsol said it had been singled out unfairly since it has cut oil and gas production less than some other energy companies.
    Senator Miguel Angel Pichetto said Spain had to analyse Repsol's action.
    "As soon as the operations of Repsol are analysed in Spain, I think that the ultra-nationalist discourse in Spain - that hides other types of problems - will also fall to pieces," Pichetto said. "And furthermore, I think it is a grave error on the (Spanish) current government to confuse the operations of a company, the role of a company with the Spanish state."
    Latin America's No. 3 economy has yet to return to global credit markets a decade after its crippling 2001/02 financial crisis and sovereign debt default -- the biggest in history.
    With memories of this debacle still fresh, many voters have hailed Fernandez's calls for "energy sovereignty."
    A survey published last weekend by local polling company Poliarquia showed 62 percent of respondents agreed with the expropriation, with 23 percent against it.
    The vote for the expropriation clears the way for final approval next week in the lower house, which is expected to debate it on May 3.
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