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Argentina Moves to Nationalize YPF

April 16th, 2012 | Categoría: Economics, Politics

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President Kirchner said Monday she will send a bill to Congress to nationalize the oil and gas company, YPF. Kirchner blames the company for falling oil and gas output, as well as the government’s growing need to import expensive fuel.

But it’s unclear how nationalizing the company will solve Argentina’s energy problems. Critics say the government itself is responsible for declining production. They cite unpredictable government policies and price caps, among other things, for the problems.

Raising production will require billions of dollars of investment in exploration and extraction. Where will that money come from now that the government will own the company?

Kirchner didn’t say.

Meanwhile, YPF’s parent company, Spain’s Repsol YPF, said it will fight the government’s decision, ensuring a lengthy and messy legal, political and economic battle over how the government will compensate Repsol for expropriating its top asset.

Within hours of the announcement, government officials were already in YPF’s building, located in Puerto Madero, taking over management of the company.

My colleagues and I wrote about the issue here for The Wall Street Journal.

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9 Comments

John Gargan says:

Good on her! YPF should never have been privatised in the first place! Menem and his cronnies made a fortune off the back of YPF and other privatisations! Argentina until yesterday was the ONLY country as far as I am aware that had ZERO control over her natural resources! Makes no sense at all…. better late than never eh! Muy bien Cristina, te pasaste che! :)

John Gargan says:

Great link on her speech!

John Gargan says:

This article is also a very good read!

http://seekingalpha.com/article/313226-analyzing-ypf-s-dividend-sustainable-in-short-term-may-have-longer-term-problems

Cristina made the right decision, no doubt!

No one could write a better telenovela than this. These corrupt monsters will stop at nothing. They have now isolated themselves from Europe with this stunt. ANYTHING to get their hands on money to then steal for themselves. Argentines continue to do nothing about these corrupt liars but in a culture where everyone steals from everyone else, what could/would replace this regime? Everyday brings a new chapter of lying, deceitfulness and blaming everyone else for their descent into utter oblivion. It is very entertaining to watch from afar. My hope is they end up like Mussolini or Ghadafi but Argentines will quickly forget and the cycle will continue.

Well said! That’s the way I felt back in 1952, stron enough to leave the country and come to USA! It was like thaat then….is still the same nowadays! Poor Argentina…being full of people like that!

Mandrake says:

I agree with you….
People in Congress:
Now I am watching animal fernandez, screaming and yelling out of control to any one who wants to say a word about stealing….
That is what we are doing just now.
Stealing and making ourselves more miserable than ever….

Jim BradfordNo Gravatar says:

It is very dishartning to see a country with so much potiential going down like this. We can only hope for better and hope people wake up befor it is to late, after all the next step could be a military takeover!

unknown says:

What she did is alright, enough with foreigners stealing our shit, get the fuck out.

MarcosNo Gravatar says:

Given the current state of Europe right now I would isolate from Europe too. Specially from Spain right now.

Mean time, every major (and mostly american) oil companies want to jump in into business: Exxon, Chevron, Conoco Philips, and so on.

You can argue about the way everything is handled and that’s OK.
Some countries take control of the companies in this way, other create wars just to be in control of the petroleum . Don’t forget about that.

My only fear is to do the same mistakes in the past, we are world champions in that matter.

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