The Argentinian government’s plans to nationalise YPF have taken a step closer to fruition as the country’s Senate voted overwhelmingly in favour of the move with 63 votes for, to 3 against.
The next major step towards the company’s expropriation is for the bill to be passed in the Argentinian Congress next week; little opposition to the bill is expected here.
The Argentinian government accused YPF (and it’s owner Repsol) of failing to invest enough in domestic production, which it is claimed resulted in the need to import more oil from abroad, turning the country into a net energy importer for the first time in nearly two decades.
Repsol, however, has rejected these claims and pointed out that YPF invested significantly more than any other company in the region and that declining production levels were seen at the majority of companies operating in Argentina. YPF had invested US$ 3 billion in 2011, and was on track to invest even more in 2012.
The dispute between the Spanish owners and the Argentinian government looks set to continue for some time yet, especially as Repsol’s demand for US$ 10 billion in compensation for the loss of its shares has been openly snubbed.
A popular move
Though condemned by many in the international community, President Kirchner’s decision to expropriate YPF has proven to be a popular move in Argentinian politics.
Kirchner and her government have claimed that the decision to nationalise YPF was made to ensure Argentina's “energy sovereignty.” However, some analysts have pointed out that the move plays heavily on popular feelings of resentment felt towards free-market policies, that are blamed for the country’s economic hardships, and detracts attention from rapidly rising inflation levels, the flight of capital from the country and Kirchner's declining popularity.
Domestic political opinion appears to be so overwhelmingly in favour of the move that even members of opposition parties have given it their full backing: one congressman, Fernando Solanas, has been quoted as saying, “They should expropriate 100 percent (of YPF), not just part of it. Oil is public interest.” Even the former president, Carlos Menem, who actually oversaw the intial privitisation of YPF, has given the move his backing, claiming that the scenario had changed.
Edited from various sources and written by David Bizley
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