Argentine Senate approves oil company takeover

Argentine Senate approves oil company takeover

Argentina’s Senate early Thursday approved the government’s move to nationalize YPF, a subsidiary of Spain’s Repsol, despite adamant US, EU and Spanish objections.

Sixty-three lawmakers voted in favor of the takeover, with just three voting against it and four abstaining, as the bill was sent to the Chamber of Deputies, which was also expected to overwhelmingly approve of it on May 3.

Argentina announced that it would seize 51 percent of YPF shares earlier this month, with some 26 percent to be held by the federal government and 25 percent going to the provinces.

Spain has led a chorus of international outrage at the move, saying it harmed bilateral relations and would deny Argentina much-needed foreign investment and expertise in the oil sector.

But the takeover is popular in Argentina, where it is supported by the government and the opposition. Buenos Aires has accused Repsol of failing to invest in its oil sector, forcing a spike in costly imports.

YPF produces 34 percent of Argentina’s oil and 25 percent of its gas, and the company holds some 54 percent of the country’s refining capacity, according to the private Argentine Petroleum Institute (IAP).

Argentina’s oil imports doubled to $9.3 billion in 2011 from the previous year and are set to top $12 billion this year, according to official figures.

Earlier this week the Standard & Poor’s ratings agency downgraded its credit outlook for Argentina from stable to negative, largely due to the YPF takeover.

Argentina declared YPF a public utility on April 16. Later the same week it extended the move to YPF Gas, a separate company 85 percent owned by a division of Spain’s Repsol.