Argentina says it will sieze controlling interest in Oil Company owned by Spanish Firm Repsol

17 April 2012 Last updated at 00:59 Share this pageEmail Print Share this page

Argentina says it will seize a controlling interest in oil company YPF that is owned by Spanish firm Repsol.

President Cristina Fernandez said a bill will be presented to the Senate allowing the government to expropriate 51% of YPF shares.

The move, announced on national television, was welcomed by her cabinet and Argentina's regional governors.

Spanish Foreign Minister Jose Manuel Garcia Margallo said the action had "broken the climate of friendship".

Speaking after a government crisis meeting, Mr Margello told journalists his government would take "clear and forceful measures", although he did not specify what these would be.

In a statement Repsol said it "considers the announced measure to be manifestly unlawful and gravely discriminatory".

Speculation has grown in recent weeks that Argentina was planning to force through a bigger state role in the firm.

Spain and the EU had already previously expressed concern at such a state takeover of YPF, in which Repsol has a 57.4% stake.

Sustained criticism

Announcing the move, President Fernandez said energy was a "vital resource". Of the seized shares, the state will hold 51% and the country's oil-producing provinces will get 49%.

Shares in YPF fell around 18% on Wall Street following the announcement.

YPF has come under sustained criticism from the Buenos Aires government.

The authorities in Argentina have accused YPF of not investing enough to increase output from its oilfields, and so lessen the need for imports, an accusation it rejects.

The company has been stripped of a number of leases, including in some of the biggest oil fields in the country.

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Analysis
Robert Plummer

Business reporter, BBC News

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YPF is not the first big firm to be nationalised by President Cristina Fernandez and it is unlikely to be the last.

Ms Fernandez has continued the economic nationalism of her late husband and predecessor, Nestor Kirchner, bringing such companies as the national airline under renewed state control.

Like Aerolineas Argentinas, YPF was privatised in the 1990s by former President Carlos Menem, a man who transformed the Peronist party into an engine of free-market reform.

But since Argentina's economic collapse of 2001-02, Peronism has gone back to its original corporatist vision, and many sectors of the economy that were liberalised in that era are now back in government hands.

Spain has previously warned Buenos Aires that a takeover of YPF could have consequences for Argentina's international image.

And on Monday Spain's ruling People's Party said the government would defend national interests.

"The government has to decide on its response, but I don't have the slightest doubt that it will be the most appropriate response to defend national interests and Spanish interests and a sufficient and complete response to defend the interest of Spanish companies in Argentina," said the general secretary of the party, Maria Dolores Cospedal.

The European Commission, the EU's executive arm, has made it clear it backs Spain's position.

In November last year, YPF, which was privatised in 1993, announced a major find of 1bn barrels of shale oil.

Argentina has some of the world's largest reserves of shale oil and gas, hydrocarbons trapped deep underground.

It is ranked number three in the world in terms of recoverable resources, behind China and the US, according to the US Energy Information Administration.
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Spain has just announced it will take action , meanwhile YBF has dropped 18% of it's share value.

Apparently this all started because YBF has not invested in its Oil capacity to give Argentina more income. Argentina has massive Oil potential the 3rd
largest in the World. To add insult to injury, Fernandez, the President of Argentina has invited Repsol, owner of YBF , to buy 51% stake in YBF.

Britain is also at "War" with Argentina over the Falklands, rumour has it there is oil around the Islands which is why Britain will not give up . Will there
be another War.?

Argentina does not have a reputation for fair play. it renaged on it's loans and is not trusted now .

http://www.typicallyspanish.com/news/publish/article_34379.shtml

Despite the protests Cristina Fernandez de Kirchner has announced the nationalisation of YPF

The YPF oil company is a subsidiary of the Spanish company Repsol and currently provides a third of their profits and half their production.

The Chairman of Repsol YPF, Antonio Brufau, said on Monday that the conflict with the Cristina Fernández de Kirchner government in Argentina must be solved by dialogue. Argentina wants to privatise the YPF subsidiary of Repsol.
Brufau said, ‘We have to talk and not impose’.

The EU is to send a delegation to Argentina to defend Repsol’s interests. They will arrive on Thursday and the objective is for the community diplomats to ‘defend the interests of a company from a member state’.

All the diplomacy has come too late as on Monday evening the Argentine President, Crisitina Fernández de Kirchner, after making threats to do so, confirmed that YPF would be expropriated by the Government ‘for the good of Argentina’, and that the intervention would be immediate.
The text declares that hydrocarbons are ‘public interest’.

She is sending a law to nationalise 51% what is the biggest oil company in the country, and a subsidiary of Spanish multinational Repsol. The 51% will, she said, be shared among the petrol producing provinces and the State.

Reports indicate she also intends to change all the directors on the board, and she has already placed a minister in charge of YPF.

The law will be voted on in the Argentine Congress in the next few weeks.

The announcement from Cristina Fernández was broadcast nationally, and was welcomed with applause and patriotic hymns. She said that she would not answer any threat, and that she would not respond to any outburst. She claimed the manoeuvre ‘is not unheard of’ and said that Argentina is practically ‘the only country in América and almost the world’ which does not manage its own natural resources. But she said that there bigger motives to taking the decision, explaining that the law is ‘a way of recovering soveriegnty’.

In Spain the Secretary General for the PP, María Dolores de Cospedal, gave the first official response from the Government, after meeting with the Prime Minister in her role as President of Castilla-La Mancha.

She said that the Government would give a ‘full response’ to the situation and confirmed that the cabinet has the support of the ‘community partners’ and of ‘partners on other levels’.

Repsol shares have collapsed in New York. Sources in the company said the measure had taken them ‘by surprise’. Trading in YPF shares was later suspended both in Buenos Aires and on Wall Street.

YPF supplies half the Repsol production and a third of its gross profit.

Later on Monday night it emerged that Argentina had expelled the Spanish Directors from the YPF headquarters. The expulsion was ordered by the Councillor of the Argentine State in YPF, Roberto Baratta, who arrived at the offices in Buenos Aires a couple of hours after the announcement.

Reports say he headed directly to the office of Antonio Gomis, the top director of the Spanish company’s subsidiary, and asked him to collect his belonging and leave the offices. The rest of the Spanish personal also had to leave the offices and cannot return to their posts tomorrow.

Prime Minister, Mariano Rajoy, was meeting with his Foreign and Industry Ministers in the Moncloa on Monday night to study the YPF situation. After the meeting the Government issued a statement saying, ‘The measure from Argentina breaks the climate of friendship and cordiality between both countries'.

Foreign Minister, José Manuel Garcia-Margallo, said he condemned the Argentine decision with ‘absolute energy’, and said that Cristina Fernández had broken a verbal agreement to resolve the situation via dialogue, and he warned that the Government ‘would take measures’ in the face of events which ‘break the relations of friendship between Spain and Argentina’.

Repsol also issued a statement late Monday. Describing the decision of the Argentine Government as ‘illicit’ the company announced it would be taking the opportune legal measures.

Mariano Rajoy makes his first trip to Latin America on Tuesday. These events have caused him to change his agenda, and he now goes to Mexico and Colombia. Mexico has become the first Latin American country to support Spain, probably their state petrol company PEMEX has a 9.4% share in Repsol.

Thanks mara_thon.......and we thought Maggie Thatcher was a Battleaxe. What's the betting Argentina will go after the Falklands again. I
think Fernandez is the wife if the ex-PM of Argentina which had no principles when it renaged on Loans a few years ago and as a result cannot get loans
from anywhere.

Spain has the support of the EU so expect a Spanish Armada , German Luftwaffe, French Rockets and Italian Gondolas to invade Argentina.

19 April 2012 Last updated at 22:48 Share this pageEmail Print Share this page

Spain says it is rallying international support against Argentina's nationalisation of the oil firm, YPF.

Spanish Trade Secretary Jaime Garcia Legaz said the EU would intervene over Argentina's seizure of the controlling stake in YPF from Spanish firm Repsol.

Foreign Minister Jose Manuel Garcia-Margallo said US Secretary of State Hillary Clinton also offered support.

But Argentine officials said they were not worried by possible reprisals over the nationalisation.

Argentine President Cristina Fernandez de Kirchner announced the measure on Monday, saying she was asserting sovereignty over Argentina's energy resources.

Her government is taking 51% of YPF, wiping out Repsol's 57.4% majority stake.

The move has wide support in Argentina but has provoked outrage in Spain, which has threatened reprisals.

The Spanish government will consider what measures to take at a cabinet meeting on Friday, and has also been rallying international support.

"There are going to be very clear interventions on the part of the European Union," Trade Secretary Jaime Garcia Legaz said, without revealing further details.

It is not clear what any reprisals might involve.

'Road to nowhere'

EU foreign ministers are expected to discuss the issue at a meeting in Luxembourg on Monday.

Spanish Foreign Minister Jose Manuel Garcia-Margallo said Spain would also raise the issue with the IMF, the World Bank and the G-20.

"We will try to pressurise Argentina so that it sees that this road is going nowhere," he said after meeting Hillary Clinton.

He added that Spain and the US had agreed to work together to "re-establish international legality".

But the Argentine government says it will not back down in its decision to nationalise YPF, which it says is a lawful action taken in the national interest.

"The government takes its decisions thinking about the Argentine people and not what the US or the Spanish government think," Interior Minister Florencio Randazzo said.

"We are not worried about any kind of reprisals," he added.

Repsol has said it wants around $10bn for its stake in YPF, but Argentina has said it does not accept that valuation.

It says YPF did not invest enough to increase output from its oil fields, forcing Argentina to rely on imports.

YPF, Argentina's biggest oil company, was privatised in 1993.

Last year it announced huge new finds of shale oil and gas.