Argentina’s center-left government is to seize a controlling 51 percent share in leading oil company YPF from the firm’s Spanish owner Repsol, in order to boost state control over the country’s crude reserves and stem a rise in fuel imports.

President Cristina Fernandez said on national television Monday that a bill will be presented to the Senate to allow the government to take control of the Buenos Aires-based firm, saying energy was a “vital resource,” Reuters reports.

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The government has accused YPF, in which Repsol has a 57.4 percent share, of failing to invest enough in local oil fields and reduce Latin America’s third biggest economy’s surging import bills, according to the BBC.

“If this policy continues – draining fields dry, no exploration and practically no investment – the country will end up having no viable future, not because of a lack of resources but because of business polices,” Fernandez said.

Compensation for the takeover will be decided by Argentina’s National Appraisal Tribunal, the president added. The country’s oil-producing provinces are to hold 49 percent of YPF’s shares.

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YPF has already been stripped of a number of leases, including in some of Argentina’s major oil fields. The company rejects the government’s claims, while Spain and the European Commission, the executive arm of the EU, have already expressed concern over an Argentine state seizure of the firm.

Shares in YPF dropped by around 18 percent on Wall Street after the takeover was announced.

According to Bloomberg, Maria Dolores Cospedal, general secretary of Spain’s governing People’s Party, said Madrid will take action in response to the takeover and will enjoy the backing of other EU member states:

“The government has to decide on its response, but I don’t have the slightest doubt that it will be the most appropriate response to defend national interests and Spanish interests and a sufficient and complete response to defend the interest of Spanish companies in Argentina.” 

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