Head of Spanish energy giant Repsol vows legal fight against Argentinian plan to seize control of subsidiary.
Argentina’s senate was set to approve the expropriation of the country’s biggest oil company on Wednesday, underscoring broad domestic support that has sparked outrage among foreign investors.
President Cristina Fernandez de Kirchner, who controls both houses of Congress, unveiled plans last week to seize a 51 per cent stake of YPF from Spain’s Repsol.
She accuses the company of under-investing and under-producing in Argentina, a charge that Repsol dismisses.
Most Argentines support the move to renationalise YPF, which was privatised in the 1990’s after 70 years under full state control.
Many blame the privatisations and other free-market reforms of that decade for provoking Argentina’s 2001/02 financial meltdown.
“The government’s bill doesn’t reflect a capricious or random decision,” ruling party senator Marcelo Fuentes said during the debate.
“It’s a logical result stemming from the need to reverse free-market thinking in energy policy.”
Al Jazeera’s Lucia Newman reporting from Buenos Aires said: “It is no doubt the Senate will approve the law, there are a few dissenting voices, it is pretty much a done deal.”
More than 60 legislators in the 72-member Senate, including many from the opposition, — could vote for the expropriation, clearing the way for final approval in the lower house, which is expected to debate it on May 3.
Once the takeover becomes law, attention will turn to the compensation Argentina will pay Repsol for its majority stake in YPF.
Officials have already said it will be far lower than the $9.3bn the company has requested.