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Argentine president signs YPF takeover law
President Cristina Fernandez signs into law the takeover of Spanish-owned YPF oil company, names new YPF leader.
Last Modified: 05 May 2012 00:08

President Cristina Fernandez has signed into law the country's takeover of the Spanish-owned YPF oil company, and named a youthful Argentine to run the new enterprise.

Assembled politicians gave her a standing ovation on Friday as she signed the law and praised her opponents in congress for joining the overwhelming majorities that passed it.

Fernandez had said she was searching for Argentines with deep experience in the global oil industry to run the company after a brief transition in which politicians were put in charge.

Her choice, Miguel Galuccio, an Argentine engineer who left YPF after Repsol bought it in the 1990s, and has risen through the ranks of Houston, Texas-based oil services giant Schlumberger Ltd.

The lower house approved the takeover of YPF by a 207-32 vote on Thursday. The Senate approved the bill last week.

Deputies in congress debated the law, which includes the expropriation of Spanish energy company Repsol's $10.5bn controlling stake in the oil company.

Spain has threatened to retaliate against the so-far-uncompensated takeover of YPF, and the Moody's rating agency has said that trading with Argentina is now riskier than before.

Argentine policy makers, however, have brushed off concerns, and more than three-fourths of legislators approved the law during Thursday's vote.

Energy self-sufficiency

President Fernandez, a combative career politician who has tightened state control of the economy, unveiled the plan to take over YPF from Repsol six months after her landslide re-election last year.

Agustin Rossi, head of the ruling party bloc in the lower house, heralded the move as a watershed in the country's energy policy.

"We're going to see a big improvement and a big difference [although] it's probably going to take a few years for us to achieve energy self-sufficiency," Rossi said.

"This isn't just about YPF, [all companies] will have to keep in mind that their business is a matter of public interest and the aim is self-sufficiency," he added.

Fernandezhas justified the renationalisation of YPF, which was privatised in the 1990s, on the grounds of low investment in boosting oil and natural gas production.

The lack of growth in production has slowed overall economic growth in Latin America's third-largest economy.

Repsol denies that there has been under-investment.

Source:
Agencies
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