May 25, 2013
Senate expected to approve YPF takeover bill
A vote on the YPF takeover bill was expected late Wednesday night or early Thursday morning as the Upper House kept debating the bill which President Cristina Fernández de Kirchner sent to Congress this week. The bill calls for the expropriation of a 51 percent of YPF’s shares, currently owned by Spanish oil company Repsol. It is expected for the bill to be passed, by a wide margin.
Prior to the debate itself, the foreseen result was already clear, counting on the support from the UCR bloc and votes in favour from the Kirchnerite bloc. That is not to say that there won’t be some rejection to the bill in motion. Aside from the voting, there are to be many speeches, arguments and discussions over the issue.Most Argentines support the move to renationalize YPF, which was privatized in the 1990s after 70 years under full state control. Many blame the privatizations and other free-market reforms of that decade for provoking Argentina's 2001/02 financial meltdown.
"The government's bill doesn't reflect a capricious or random decision," ruling party senator Marcelo Fuentes said during the marathon debate. "It's a logical result stemming from the need to reverse free-market thinking in energy policy."
A survey published last weekend by local polling company Poliarquia showed 62 percent of respondents agreed with the expropriation, with 23 percent against it.
More than 60 legislators in the 72-member Senate -- including many from the opposition -- could vote for the expropriation, clearing the way for final approval next week in the lower house, which is expected to debate it on May 3.
Argentina's trade surplus, a pillar of President Fernandez de Kirchner's economic policy, shrank last year as fuel imports more than doubled - sending the issue of flagging oil and natural gas production to the top of the president's list of priorities.
"Moments like this define whose side you are on," said Senator Daniel Filmus, a Fernandez ally. "Are you on the side of the national interest or are you are fighting the side of those who pray on our natural resources."
Once the takeover becomes law, attention will turn to the compensation Argentina will pay Repsol for its majority stake in YPF. Officials have already said it will be far lower than the $9.3 billion the company has requested.
The nationalization has investors and trade partners worried about increasingly antagonistic policies such as import curbs.
Madrid has vowed to halt multimillion-dollar imports of biodiesel from Argentina in retaliation while ratings agencies Moody's and S&P said the YPF seizure could heighten Argentina's economic isolation at a time of slowing growth.