American Awakening: Argentina passes law to nationalize Spanish firm

Argentina’s senate has endorsed a presidential decree to nationalize Spain-owned oil company YPF amid widespread domestic support for the plan.

At the Wednesday session of the senate, legislators from both the ruling party and the opposition voted in favor of the decree issued by President Cristina Fernandez de Kirchner last week, AFP reported.

The proposal, which enjoys nationwide popularity, will be sent to the lower house of the parliament for final approval.

Fernandez said on Monday that Argentina had to take back the oil firm, formerly a state-owned Argentine oil company for over 70 years, as it is the only nation in Latin America “that does not manage its natural resources.”

YPF was privatized in the early 1990s and the Spanish energy giant, Repsol, acquired a majority of the company’s stake in 1999.

With a market value of USD 10.6 billion, YPF accounts for about 25 percent of Repsol’s profits and 60 percent of its production.

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

Argentina’s move has infuriated Madrid and drew sharp criticism from the US and the EU, prompting Brussels to warn of retaliatory measures against Buenos Aires.

The South American state accuses Repsol of draining the oil company as well as underinvesting in its oil and gas fields since it took control. Repsol, on the other hand, blames Argentina’s ever-changing mix of subsidies and price caps for depressing production.