Argentina takes control of oil firm

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The European Commission scrapped a meeting with Argentinean officials on Tuesday, April 17, in protest at a decision by the country to renationalize its largest oil company.

European Commission spokeswoman Pia Ahrenkilde Hansen said a trade meeting scheduled for tomorrow had been shelved until further notice.

"We are at the moment giving political support to Spain while also exploring all options," Ms Hansen declared.

"This creates an uncertainty which is not helpful to our economic relations and to the economy as a whole."

European Commission president Jose Manuel Barroso said he was "seriously disappointed" by Argentina's decision to bring YPF back into public ownership by taking control of 51 per cent of its shares currently held by Spanish transnational Repsol.

Argentinean President Cristina Fernandez presented a Bill to Congress on Monday that would empower her government to regain the majority stake.

The expropriation requires the approval of two-thirds of legislators in Congress, but Ms Fernandez decreed that the state was putting the company under immediate state intervention.

Addressing citizens massed in Buenos Aires shouting slogans, waving national flags and carrying banners supporting the takeover, Ms Fernandez said: "We are the only country in Latin America, and I would say in practically the entire world, that doesn't manage its own natural resources."

She said the nationalization was about "recovering sovereignty."

Rightwingers blame the government for an energy shortage and high petrol prices.

But Ms Fernandez said the shortage was the result of Repsol's failure to invest in YPF.

She said that Argentina had a deficit of £1.9 billion [$3.03 billion] last year partly due to energy imports.

Ms Fernandez did not say whether Repsol and its stockholders would be compensated.

Repsol has released a statement promising to protect the interests of its shareholders. It called the move "unlawful and gravely discriminatory."

Venezuela's  Foreign Ministry backed Ms Fernandez's decision to renationalize YPF.

"Venezuela puts all its technical, operational, legal and political experience of Petroleos de Venezuela at the disposition of the government and its people to strengthen the state oil sector."

Originally appeared at MorningStarOnline http://www.morningstaronline.co.uk/news/content/view/full/117933

Photo: Argentina's President Cristina Fernandez motions for silence while her proposed bill to nationalize Spain's controlled oil company YPF, is read aloud at Government House in Buenos Aires, April 16. Fernandez said in an address to the country that the measure sent to congress on Monday is aimed at recovering the nation's sovereignty over its hydrocarbon resources. Natacha Pisarenko/AP

 

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  • Some historical background is needed here. The Argentine oil industry, and a lot of other things, were privatized during the 1990s during the very corrupt administration of Carlos Menem, subsequent to a period in which US supported military dictators ravaged the country and ran up bills for military hardware that was used, not to defend Argentina against foreign invaders, but rather to suppress the Argentine working class and popular masses. Menem's actions led to a brief economic boom as foreign corporations zoomed into Argentina to take advantage of these fire-sale privatizations, but within a few years the country was on the ropes, totally broke and at the mercy of foreign creditors. When Nestor Kirshner, husband of the current president, came to power at the beginning of the 2000s, he stiffed foreign creditors and, after an initial difficult period, got away with it.
    So these foreign corporations should sing "don't cry for us, Argentina" rather than the weeping and wailing we are now hearing. They played a hard game and now REPSOL is losing. Unfortunately in today's news the US State Department came out with a totally out of line statement blasting Argentina for the nationalization announcement. It is, quite simply, none of the business of the United States. People in our country should let our leaders and politicians know that we think Argentina, as a sovereign, independent country, has every right to control its own resources.

    Posted by Emile Schepers, 04/19/2012 6:38am (2 years ago)

  • Viva Argentina!

    Posted by Gabriel Falsetta, 04/18/2012 5:17pm (2 years ago)

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