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Congress passes YPF takeover

May 4, 2012

Argentina's expropriation of oil company YPF has been overwhelmingly approved by lawmakers, clearing the controversial move for President Cristina Fernandez de Kirchner's signature.

YPF and Argentine flags fly side by side
Image: picture-alliance/dpa

Argentine lawmakers on Thursday handily approved the nationalization of oil firm YPF, subsidiary of Spanish energy giant Repsol, making official a deal that has shaken ties between the two nations.

The Chamber of Deputies passed the legislation detailing the expropriation by a staggering 207-32 margin, sending it to President Cristina Fernandez de Kirchner for her signature. The wide majority supporting the bill included members of the opposition.

"All oil companies that operate in Argentina, Repsol and the rest, have to work in the public interest, which in this case means energy self-sufficiency for Argentina," said Agustin Rossi, leader of the majority bloc of lawmakers.

Kirchner's government had been pressuring Repsol to increase oil production in Argentina before announcing the expropriation plans last month.

"This decision is going to require all Argentines, and especially those who have institutional responsibilities, whether in the government or opposition, to face the challenge of building a YPF that is modern, competitive, (and) aligned with the interests of the country," Kirchner said.

The plan buys out Repsol shares to gain a 51-percent stake in YPF, to be split between the federal government and the oil-producing states. YPF was previously a state oil company but was privatized in 1992.

Spain and the European Union have both strongly criticized the move, and Repsol said it will seek at least $10 billion (7.6 billion euros) in compensation as well as international arbitration to settle the matter.

acb/nrt (AFP, AP, Reuters)