ARGENTINA yesterday said it plans to renationalise its biggest oil company, YPF, drawing swift warnings from key trade partners and risking the country’s further economic isolation.
YPF, controlled by Spain’s Repsol, has been under intense pressure from Fernandez’s centre-left government to boost production, and its share price has plunged due to months of speculation about a state takeover.
President Cristina Fernandez said the government would ask Congress, which she controls, to approve a bill to expropriate a controlling 51 per cent stake in the company by seizing shares held exclusively by Repsol, saying energy was a “vital resource”.
YPF’s market value is $10.6bn (£6.6bn), although an Argentine tribunal will be responsible for valuing the company as part of the takeover. Central bank reserves or state pension funds could be used for compensation, analysts say.
Spain vowed “clear and strong” measures over what it called a hostile decision, while the EU's executive European Commission warned that an expropriation would send a very negative signal to investors.