Argentine Congress approves bill to nationalize YPF

The Argentine congress approves takeover of YPF

Argentina’s Congress has overwhelmingly approved a takeover of the country’s largest energy company, YPF, from its Spanish controlling shareholder.

The Argentine lawmakers gave their final approval to the nationalization bill on Thursday, giving President Cristina Fernandez de Kirchner the green light to expropriate a 51 per cent stake from Spain’s Repsol, Reuters reported.

The Chamber of Deputies voted 207-32 in favor of the bill, which enjoys nationwide popularity. The nationalizing bill, which was also cleared in the Argentina’s senate last week, heads to the President’s office to be signed into law.

The vote reflects a political victory for Kirchner, who could reach the two-thirds majority in both houses of Congress in order to pass the bill. Meanwhile, people in Buenos Aires staged a massive protest on weekend to support the President’s move.  Continue reading

‘Saudi Arabia unable to make up for absence of Iran oil’

Iran ranks first in the world in terms of oil and gas resources.

A senior National Iranian Oil Company (NIOC) official says Saudi Arabia will not be able to make up for the absence of Iran’s oil in the European markets if Iran halts EU oil exports.

“I announce with certainty that [crude oil produced by] Saudi Arabia cannot take the place of Iranian oil in the global market,” Seyyed Mohsen Qamsari, NIOC director general for international affairs, said Wednesday.

On January 23, EU foreign ministers reached an agreement in Brussels to impose sanctions on oil imports from Iran as of July 1 over Western claims that Tehran’s nuclear energy program contains a military aspect. The sanctions involve an immediate ban on all new oil contracts with the Islamic Republic and a freeze on the assets of the Central Bank of Iran within the EU.

Ahead of the EU decision, Saudi Arabia’s Oil Minister Ali al-Naimi had said that the Kingdom is able to produce 12.5 million barrels per day (bpd) of crude oil. Riyadh is currently producing around 9-9.5 million bpd.

Naimi stressed that Saudi Arabia is ready to meet the increase in the global demand as a result of “any circumstances.”  Continue reading

US condemns Argentine expropriation of YPF Oil Company

The US has joined Spain and Britain in condemning Argentina’s expropriation of the Spanish-owned oil and gas company, YPF, Press TV reports.

The US State Department spokesman Mark Toner condemned Argentina’s nationalization of the oil company, saying his country views the act with negativity.

Toner also warned that the move would ultimately hurt Argentina’s economy.

However, the Argentine government has responded firmly to the criticism, arguing that the decision was taken based on the country’s national interests.

“The project aims at certain states’ rules to lead a strategic company. We do not govern on behalf of the US and the Spanish people,” Argentine Interior Minister Florencio Randazzo said.

Argentine President Cristina Fernandez has slammed the company for failing to re-invest in local oil and gas production, which forced Buenos Aires to pay more than USD 9 billion to import fuel last year.

On Monday, Fernandez announced the decision to reclaim YPF, which was formerly a state-owned Argentine oil company, at a meeting with her cabinet and provincial governors. She said that Argentina had to take back the oil company since it is the only nation in Latin America “that does not manage its natural resources.”

The move to declare YPF Gas a public utility by taking 51 percent of its shares is an extension of the takeover of YPF Oil Company, the major subsidiary of Repsol.

Repsol President Antonio Brufau said on Tuesday that the company would take legal action against Argentina, seeking compensation of about $10 billion.

Meanwhile, the Spanish government has also criticized the move by claiming that Argentina is taking a risk of becoming “an international pariah” if it takes control of the YPF, in which Repsol has a 57.4 percent stake.

Spain is Argentina’s largest foreign investor. Last year YPF, the main oil company in Argentina, announced a major find of 1 billion barrels of shale oil.

Argentina Oil Reclamation: An International Debate

A woman holds an Argentine national flag in front of the presidential palace after Argentine President Cristina Fernandez de Kirchner announced that oil company YPF, controlled by Spain's Repsol, is subject to expropriation and that a bill being introduced would give the state a 51 percent share, in Buenos Aires on April 16, 2012. (AFP Photo / Daniel Garcia)

Is it theft on a grand scale or simply the legitimate re-nationalization of a country’s resources for the benefit of the people?

Argentina’s decision to take control of the country’s largest oil company YPF has created a schism in the international community—with winners and losers falling into place along the divide.

YPF, Argentina’s largest oil company, was privatized in 1993 and purchased at the time by Spain’s Repsol which up until this latest move owned 57% of the company.  Claiming Repsol had not lived up to an agreement to invest in the infrastructure of the country, Argentina’s President Christina Fernandez announced her intentions of reclaiming the energy company.

The new ownership structure would give the federal government 51% control of YPF, with the remaining 49% of the company divided amongst the energy producing governments of the country.  Repsol’s controlling interest in the company under this formula would be reduced to a paltry 6%.

Repsol is angered by the move calling it an “illegitimate and unjustifiable act.”  In recent weeks talks about the possibility of nationalization have been driving stocks for YPF down, but still a conservative estimate of the value of the company is more than $13 billion. As compensation for the nationalization of their privately held subsidiary, Repsol has asked for a sum of around $10.5 billion, but it is unlikely that the company will receive that amount if anything at all.

Repsol may even be fined by the Argentinean government for environmental damage to the country’s interior—meaning Respol might have to pay Argentina for the government takeover. The company has also maintained that the move by President Fernandez is primarily a political one, to try and gain public support amidst a continuing energy crisis in Argentina.

Also, under the guidance of Repsol, YPF recently discovered vast amounts of shale rock oil reserves in the Vaca Muerta basin.  This important find puts Argentina on the map as the holder of the world’s third largest shale gas reserves behind China and the United States.  Repsol believes the current nationalization movement is nothing more than an obvious grasp for control of this major discovery.  Having been set up through privatization in the 1990’s, then allowed to develop the company for 20 years; the first “loser” in this complicated and controversial process would have to be Repsol. Continue reading

Libya: So it was all about oil after all!

A view of Zawiya oil refinery is pictured in Zawiya 57km (35 miles) west of Tripoli April 11, 2012 (Reuters/Ismail Zitouny)

Last year NATO countries bombed Libya, demanding “democracy” in the country. But now it’s clear it was all about oil and it’s not like the Americans and Brits are going to be democratic about it, and share those spoils equally with France and Italy.

So… oil giants Total from France and ENI from Italy are just going to have to wait in the sidelines while the hungry American and British big boys take their juicy oil slices first… ExxonMobil, Chevron, Texaco, BP, Shell…

It’s no surprise then to read in The Wall Street Journal that the US Securities & Exchange Commission (SEC), together with the puppet Libyan “authorities” are launching “investigations” into both companies’ “financial irregularities” in their shady dealings during the forty-two years of Gaddafi’s power.  Now who would have imagined this!  An Italian oil company involved in kick-backs?   Corruption at the highest echelons of the French oil industry?!?   Tsk, tsk!!!  Unheard of…!    The US and UK would never do something like that!!   Just ask Enron, ask Halliburton, ask BP…

Clearly, major oil companies will now be judged on how close or how far they were from the Gaddafi’s, and on how much their respective countries contributed to last year’s war effort.  Perhaps even on how much and how far and wide they shared their huge ill-obtained profits.  It seems that scorecards must now be completed… Continue reading