President Cristina Fernández de Kirchner today presented a bill to Congress that will expropriate 51% of the oil company Repsol-YPF, drawing the state’s new shares entirely from the private Spanish company Repsol, which has been the majority stakeholder since 1999.
Of the 51% to be managed by the state, 49% will be distributed among Argentina’s provinces via the Federal Organisation of Oil Producing States (OFHEPI), which will share equal input with the national government over the company’s management. Any future adjustment in the distribution of shares owned by the state will also require approval from 2/3 of Congress.
“The model chosen for the future of YPF is not nationalisation but recovery of sovereignty and control of hydrocarbons,” Fernández de Kirchner said.
Defending YPF’s move to a mixed, state-run company, the president cited statistics showing that fuel imports doubled in Argentina between 2010 and 2011, falling into a negative relationship against exports for the first time in 17 years. Repsol, meanwhile, had been maintaining high levels of profit by selling its reduced production in premium markets.
Apart from the 51% that will fall under state control, the private Petersen group will maintain its 25.46% share, Repsol will retain 6.43%, and the remainder will be open to new sources.
“The government will arrange the implementation of this measure with the help of the provincial states and the national public, as well as public and private capital both domestic and international,” the President stated.
As part of the proposed transition, YPF would be re-staffed with new directors and trustees to run the company in the public interest and toward the goal of hydrocarbon sovereignty, replacing Repsol’s management team.
Addressing earlier criticism and threats from the Spanish government, which had warned that there would be consequences to Argentina for any action taken against Repsol, Fernández de Kirchner said that she would not respond to such belligerent diplomacy and would act in the best interest of the country.
Speaking more generally, the President emphasised the necessity of sustainable and equitable development throughout Argentina, along with sovereign control of the country’s key national resources.