Argentina: Fernandez announces nationalisation of YPF
April 16, 2012
On 16 April, the government announced a decree to nationalise YPF, the country's main oil producer and local unit of Spanish energy firm Repsol. The bill, which is likely to be approved by Congress given the strong majority held by the ruling party in both houses, allows the Fernandez administration to expropriate 51% of YPF shares. Control will be split between the oil-producing provinces and the central government. In recent months, the government has been putting pressure on oil producers in the country to boost production. According to Argentine authorities, lack of investment by oil companies has turned the country into a net energy importer in recent years. During March, various provincial governments had already revoked operating licenses held by YPF. In addition, at the end of the month, the southern province of Neuquen revoked concessions held by the local units of Brazil's Petrobras and Canada's Azabache Energy. Since re-election in October, the trade surplus has been the Fernandez administration's main concern. Since 1 February 2012, purchases from abroad need approval from the national tax agency (AFIP, Administracion Federal de Ingresos Publicos). Against this backdrop, a group of 14 countries led by the United States and the European Union issued a joint statement at the World Trade Organization (WTO) on 30 March, expressing concern regarding Argentina's protectionist stance and announcing further action at the WTO if the country does not take immediate steps to reverse its policies.
Author: Armando Ciccarelli, Head of Data Solutions