Argentine lawmakers approve YPF takeover

Argentine lawmakers approved by a wide margin Thursday the takeover of Spanish-owned oil company YPF, sealing a measure that has roiled the country’s trade ties with Europe.

Hugely popular in Argentina, the bill pushed by President Cristina Kirchner earned wide support in the Chamber of Deputies, passing by a vote of 207-32 with six abstentions, after easily sailing through the Senate last week.

The move will see Argentina officially seize control of YPF, a subsidiary of Spanish oil company Repsol, by taking a 51 percent share to be split between the federal government and the country’s oil-producing provinces.

YPF is a former state oil company that was privatized in 1992.

Kirchner has argued that the move was justified because Argentina faces sharp rises in its bill for imported oil, and Repsol has failed to make agreed investments needed to expand domestic production.

Spain, the European Union and international organizations have, however, harshly criticized the measure, warning that it puts Argentina’s overall trade and investment relations in jeopardy.

A private Argentine group, Peterson, will retain a 25 percent share in YPF, and Repsol will be left with nearly 6.5 percent. The remainder of the shares will be publicly traded.

YPF accounts for 34 percent of Argentina’s domestic oil production, 25 percent of domestic gas production and 54 percent of domestic refining, according to the Argentine Oil Institute.

Repsol said it will seek at least $10 billion in compensation for its expropriated shares, as well as international arbitration to settle the claim.

Argentina counters that Repsol is leaving a $9 billion debt, while in just over a decade it earned more than $15.7 billion, most of it sent overseas and not reinvested.

Spain’s Foreign Minister Jose Manuel Garcia-Margallo earlier urged Argentina to “pay a fair price” for YPF.