Business, Economics and Jobs

Argentina: YPF vows to continue gas supplies


A truck carrying gasoline in downtown Buenos Aires on April 17, a day after Argentine President Cristina Fernandez de Kirchner announced YPF oil company, controlled by Spain's Repsol, would be expropriated.



Argentina’s biggest oil firm, YPF, has pledged to keep providing gas supplies to local customers, as the dispute over its forced nationalization continues.

In a statement released Saturday, the firm said it would continue to deliver liquefied natural gas, despite the decision of Spain’s Repsol to cancel deliveries, the BBC reports.

President Cristina Fernandez announced on national television earlier this month that her center-left government would seize a controlling 51 percent share in YPF, wiping out Repsol's 57.4% majority stake in order to boost state control over Argentina’s crude reserves and stem a rise in fuel imports.

"There will be 5 million additional cubic metres per day" of LNG because of higher production and imports from Bolivia, the team charged with expropriating Repsol’s interest said Sunday.

YPF produces 34 percent of Argentina's oil and 25 percent of its gas, and holds some 54 percent of the nation's refining capacity, according to the Agence France Presse.

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Last week Argentina’s Senate approved plans to nationalize YPF, paving the way for likely approval by the lower house next week.

The move has been condemned by Spain, and the European Union has threatened to bring the case to the World Trade Organization. Some observers have warned that the nationalization may have negative consequences for foreign investment in Argentina.

Most Argentines support the move to renationalize YPF, which was privatized in the early 1990s after seven decades under full state control.

Many blame the privatizations and other liberal, free-market reforms enacted in the ‘90s for the financial meltdown that hit the country in 2001/2002, according to Reuters.

Buenos Aires 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.

Repsol’s chairman, Antonio Brufao, has said Argentina’s actions “will not remain unpunished” and vowed to fight the move in international courts if necessary, with the firm seeking $10 billion in compensation for its stake in YPF. 

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Tagged: Argentina.