Argentina Proposes Nationalization of Biggest Oil Company

Argentina's President Cristina Fernandez de Kirchner holds a test tube containing petrol during a ceremony at the Casa Rosada presidential palace in Buenos Aires April 16, 2012. (Photo: Reuters/Stringer)

Argentina Proposes Nationalization of Biggest Oil Company

President sees 'the recovery of sovereignty' in take-back of natural resources from corporations

Argentine President Cristina Fernandez has proposed a bill to seize back major oil shares from the country's biggest oil company YPF, owned by Spain's Repsol. The move is facing aggressive opposition from the corporation and from the Spanish government, threatening that Argentina will become "an international pariah".

"We are the only county in Latin America, and I would say in practically the entire world, that doesn't manage its own natural resources," Fernandez said. She said her proposal "is not a model of statism" but "the recovery of sovereignty."

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Associated Press: Argentine leader moves to nationalize oil shares

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. She said the shares being expropriated will be split between the national and provincial governments. [...]

Governors of oil-producing Argentine provinces have withdrawn about 15 oil leases, representing 18 percent of YPF's crude production, alleging the company failed to keep its promises to develop them. YPF has countered that it has invested millions in those areas and plans to increase production, but Argentine officials have said that still falls short.

How Argentina may try to displace Repsol, which owns slightly more than 57 percent of YPF, has been the subject of wide speculation since the government's pressure campaign began in February. The president's proposal would leave Repsol with just a little more than 6 percent of YPF's shares. [...]

The president's proposal declares that the exploration and exploitation of hydrocarbons is "of national public interest" and declares that building up the nation's supply is a priority.

Argentina this year expects to import more than $10 billion worth of gas and natural liquid gas in the face of an energy crisis, according to estimates from the hydrocarbon sector.

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Al-Jazeera: Spain clashes with Argentina in oil row

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