Argentina’s President, Cristina Fernandez de Kirchner, has unveiled her country’s intent to seize control of the largest oil company in the country, Repsol’s YPF. Repsol is a Spanish company which is why it should come as no surprise to find Madrid is outraged by the statement.
Already suffering from economic isolation, Argentina has been warned by key trade partners that seizing YPF could result in additional sanctions intended to negatively impact the country’s economy.
Fernandez stated that the government would ask Congress to approve a bill to dispossess a controlling 51% stake in the company by seizing Repsol’s shares. As she controls Congress, the bill would clearly pass. She said that the oil company shares would be seized as the energy is a “vital resource” to the country. Fernandez was quoted by Aljazeera having said:
“If this policy continues – draining fields dry, no exploration and practically no investment – the country will end up having no viable future, not because of a lack of resources but because of business policies.”
In response to Argentina’s announcement regarding the takeover of YPF, Spain’s Industry Minister Jose Manuel Soria was quoted at a crisis cabinet meeting having said:
“It’s a hostile decision against Repsol, thus against a Spanish business, and thus against Spain. The government is announcing that it will take all the measures it considers appropriate to defend the legitimate interests of Repsol and of all Spanish businesses abroad.”
YPF shares have been dropping in light of the recent news and even prior as speculation regarding the situation left investors uncertain as to the future of Repsol’s YPF in Argentina.