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Argentinian president moves to nationalise Spanish-owned oil assets
President Cristina Fernández de Kirchner shocks oil industry by planning to seize 51% of Repsol’s Argentinian assets
Argentina sent shock waves through the oil industry by announcing plans to nationalise local oil assets controlled by a Spanish company, in a controversial move that threatens to sour the already troubled relationship between the two countries.
The move to seize 51% of Repsol’s YPF business in Argentina sent the company’s shares spinning down 18% on Wall Street and will worry other big foreign investors such as BP.
Cristina Fernández de Kirchner, Argentina’s president, introduced the new measure to Congress in a bid to recover sovereignty over its national hydrocarbon resources.
Kirchner accused Repsol of failing to produce enough oil through YPF to meet Argentina’s energy requirements. Repsol’s alleged failure threatened to “practically turn us into an unviable country,” Kirchner said. Economic and political interest in the country’s hydrocarbons has rocketed since the end of last year when YPF announced it had discovered a shale oil site that could potentially yield 1bn barrels.
Politicians have accused Repsol of failing to invest enough in future production at a time when the high cost of oil is undermining the country’s economy.
The nationalisation comes amid escalating threats against operators drilling for oil off the disputed Falkland Islands.
Argentina is expected to expropriate about 24% of YPF from Repsol and another 26% from Argentina’s Peterson Group at a price yet to be determined by the government.
Kirchner said the price would be set by the national appraisal tribunal and insisted the business could continue to be managed “professionally”. She said Argentina was one of the few countries that did not control its own oil.
Pictured: The Argentinian president, Cristina Kirchner, said YPF had not produced enough oil. Photograph: Pablo Porciuncula/AFP/Getty
