Argentina Senate backs YPF oil nationalisation
- 26 April 2012
- From the section Latin America & Caribbean
Argentina's Senate has approved the controversial decision to nationalise the oil company YPF.
The plan to strip the Spanish firm Repsol of its controlling stake in YPF was announced last week by President Cristina Fernandez de Kirchner.
The move has been condemned by Spain, and the EU has said it may take the case to the World Trade Organization.
The plan has, however, proved popular in Argentina. The proposal will now be sent to the lower house for approval.
Ms Fernandez's allies control both houses of Congress and even some opposition legislators have supported the nationalisation.
"The government's bill doesn't reflect a capricious or random decision," ruling party Senator Marcelo Fuentes told Reuters before the vote.
"It's a logical result stemming from the need to reverse free-market thinking in energy policy."
Some observers have warned that the nationalisation may have negative consequences for foreign investment in Argentina, but Ms Fernandez insists the move is necessary to reduce the state's energy bill.
In 2010 Argentina started importing fuel for the first time since YPF, Argentina's biggest oil company, was privatised in the early 1990s.
Ms Fernandez blames Repsol, accusing it of having drained YPF since acquiring a controlling stake in the 1990s and not investing enough to cope with growing internal demand. Repsol insists it has invested in Argentina.