The Argentine Senate took its first legislative steps toward nationalising YPF yesterday, with commissions signing the government’s proposal and setting its debate date as next Wednesday.
Three committees – Budget and Finance; Constitutional Affairs; and Mining, Energy and Fuels – signed the proposal, which the government said Tuesday should become law on 3rd May.
“The debate has been very important, very rich. I think the presence of national officials and also specialists allow for the formation of an opinion, a vision on the issue,” said Senator Miguel Pichetto at the end of the commissions’ plenary session.
On 16th April, President Cristina Fernández de Kirchner presented a bill to Congress that would see Argentina expropriate 51% of the oil company Repsol-YPF. YPF – standing for Yacimientos Petrolíferos Fiscales, which was also the world’s first 100% state-owned and state-run oil company –was privatised under the former president Carlos Menem’s government in the early 1990s. Repsol has been the majority stakeholder in the company since 1999.
During presentations to the Senate yesterday, Senator Aníbal Fernández also anticipated that YPF Gas will be expropriated from Repsol, as well.
Joining Forces
As the Argentine daily Página/12 pointed out today, most political forces within Argentina are in favour “in general” of the move to nationalise YPF.
“The national political forces, who have a history and commitment to the interests of the country, are in general joining with the President’s project,” said Pichetto, who sits on the bench of the ruling Partido Justicialista.
Buenos Aires Mayor Mauricio Macri, who is also the leader of the Propuesta Republicana or ‘PRO’ party, is one of only two political forces that has openly declared himself against nationalisation.
That said, Macri noted today that if he were to win the presidential election in 2015, he would keep YPF in state hands, but would be “doing it well.”
“If you have already done the damage to break a promise made in ’92 by the same who made it, to change it back in 2015 would not be good. The damage has already been done,” he said today, according to the Argentine daily La Nación.
Market Response
YPF shares took a beating in the markets yesterday, crashing 32.7% on Wall Street and 28.7% on the Buenos Aires Stock Exchange.
The collapse in the share price is important, as it will be part of what determines how much Argentina will pay Repsol for YPF.
Repsol executive president Antonio Brufau says the company is worth approximately US$10.5 billion.
Página/12 reports that in yesterday’s plenary session, Deputy Minister of Economy and oil company auditor Axel Kicillof said there will be environmental costs that should be taken into consideration, as well.
“The environment is not up for the bidding and does not have a price. They will have to pay for alleged environmental damage,” said Minister of Planning Julio De Vido, who was also at the session.
