The seizure delighted nationalists across the region and stunned the oil market, in part because the Repsol affiliate, YPF, had recently announced that discoveries in remote Patagonia could hold 23 billion barrels in natural gas and oil. Some oil analysts said the expropriation could dry up much-needed investment in Latin America’s third-largest economy.
“I have rarely seen actions like these directed at one company,” said Francisco Monaldi, director of the IESA business school’s Energy Center in Caracas, the Venezuelan capital.
Many Argentines have an emotional link to YPF, which until its 1999 privatization had been the state energy company for decades. Fernandez said the takeover signaled the “recovery of sovereignty and the control of a fundamental instrument,” Argentina’s largest company, valued at $18 billion.
The nationalization, which the Argentine Senate approved early Thursday morning, gives the government control of 51 percent of YPF, leaving the rest to investors. Calls and e-mails seeking comment from the president’s office and the Economy and Planning ministries were not returned.
But Fernandez has said that the expropriation was necessary because a lack of investment had caused YPF’s production of oil and gas to fall, forcing Argentina to import $9.4 billion in fuel last year.
“We need to have sovereign control of our resources,” she said Tuesday. “I am absolutely certain that this is the only road possible for us.”
But interviews with a YPF official, former Argentine government energy executives and oil analysts paint a more complex picture, one that shows a systematic four-month effort against a company that had been in the government’s good graces.
‘A harassment campaign’
Until late last year, officials in Fernandez’s administration had feted the company’s progress, and Planning Minister Julio De Vido worked closely with YPF executives. Repsol’s president, Antonio Brufau, was a frequent visitor to Buenos Aires, where he often met with top economic and energy officials.
“The relations between Repsol and the Argentine government were normal and friendly, practically from the beginning of the privatization,” said Eduardo Fernandez, who was an energy official in the government headed by Nestor Kirchner, Fernandez’s husband, who died in 2010. “It was on a first-name basis. . . . There had not been complaints, formally or informally, about energy companies or YPF in particular.”
Then last year came YPF’s discovery of oil and gas deposits in Patagonia’s Neuquen province, a swath called Dead Cow, that if fully developed could make Argentina an energy heavyweight.