Argentina takes control of oil firm

The European Commission scrapped a meeting with Argentinean officials on Tuesday, April 17, in protest at a decision by the country to renationalize its largest oil company.

European Commission spokeswoman Pia Ahrenkilde Hansen said a trade meeting scheduled for tomorrow had been shelved until further notice.

“We are at the moment giving political support to Spain while also exploring all options,” Ms Hansen declared.

“This creates an uncertainty which is not helpful to our economic relations and to the economy as a whole.”

European Commission president Jose Manuel Barroso said he was “seriously disappointed” by Argentina’s decision to bring YPF back into public ownership by taking control of 51 per cent of its shares currently held by Spanish transnational Repsol.

Argentinean President Cristina Fernandez presented a Bill to Congress on Monday that would empower her government to regain the majority stake.

The expropriation requires the approval of two-thirds of legislators in Congress, but Ms Fernandez decreed that the state was putting the company under immediate state intervention.

Addressing citizens massed in Buenos Aires shouting slogans, waving national flags and carrying banners supporting the takeover, Ms Fernandez said: “We are the only country in Latin America, and I would say in practically the entire world, that doesn’t manage its own natural resources.”

She said the nationalization was about “recovering sovereignty.”

Rightwingers blame the government for an energy shortage and high petrol prices.

But Ms Fernandez said the shortage was the result of Repsol’s failure to invest in YPF.

She said that Argentina had a deficit of £1.9 billion [$3.03 billion] last year partly due to energy imports.

Ms Fernandez did not say whether Repsol and its stockholders would be compensated.

Repsol has released a statement promising to protect the interests of its shareholders. It called the move “unlawful and gravely discriminatory.”

Venezuela‘s  Foreign Ministry backed Ms Fernandez’s decision to renationalize YPF.

“Venezuela puts all its technical, operational, legal and political experience of Petroleos de Venezuela at the disposition of the government and its people to strengthen the state oil sector.”

Originally appeared at MorningStarOnline

Photo: Argentina’s President Cristina Fernandez motions for silence while her proposed bill to nationalize Spain’s controlled oil company YPF, is read aloud at Government House in Buenos Aires, April 16. Fernandez said in an address to the country that the measure sent to congress on Monday is aimed at recovering the nation’s sovereignty over its hydrocarbon resources. Natacha Pisarenko/AP