Argentina to nationalize YPF

April 17, 2012 at 3:04 PM

RIO DE JANEIRO, April 17 (UPI) -- Argentina's president said the government would seize controlling interest in YPF, 57 percent of which is owned by Spanish oil concern Repsol.

With the announcement of the takeover by President Christina Fernandez de Kirchner, the government is moving quickly, appointing two top presidential aides, Julio de Vido and Exel Kicillof, to take over for Chief Executive Officer Sebastian Eskenazi, who Kirchner ousted from his position.

The plan is to have the government take over 51 percent of the company. Of the 51 percent that it has seized, the federal government will take over 51 percent, while Argentina's states will control 49 percent, The New York Times reported Tuesday.

Spain and Europe quickly criticized the move and analysts said it signals a much higher risk for international firms doing business in Argentina.

The move "Broke the climate of cordiality and friendship that presided over relations between Spain and Argentina," said Spanish Foreign Minister Jose Manuel Garcia Margallo.

He said the Spanish government "condemned," the news, "with the utmost energy."

"The oil industry in Argentina is just getting ready to take off, but this may be a way to kill it in its infancy," said senior oil analyst at Oppenheimer & Company Fadel Gheit.

Repsol said it would search out every legal opportunity to stop the takeover. Kirchner said a tribunal would be organized to decide how to compensate Repsol and its shareholders.

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