Argentina again challenges global capital as the president Cristina Fernandez pushed a bill that will renationalize the country's largest oil company YPF owned by Repsol in Spain. Of course the act immediately set up an international howl of complaints including from the U.S.
Fernandez says that the move will enable Argentina to recover sovereignty over its oil resources. Many countries are content to sell their resources to the highest bidder among the internatioanal oil giants, a practice that has landed Argentina in its present difficulties. YPF does very well in Argentina and its operations there represent about a third of its profits. Given the present economic mess in Spain losing YPF will be a huge blow.
YPF has recently found large reserves of oil and natural gas. The Argentine government has complained for years about the low level of output of the company. Argentina has been forced to import over 10 billion U.S. in natural and liquid gas to address an energy shortage while it exports oil.
Fernandez said:"We are the only country in Latin America, and I would say in practically the entire world, that doesn't manage its own natural resources," . The European Commission warned Fernandez that nationalizing the company would hurt the investment climate in Argentina and that it supports Spain's position.
But Fernandez said:"This president is not going to answer any threat, is not going to respond to any sharp remark.," She was applauded by business and union leaders. Fernandez has also renationalized the main airline and a state pension fund. For much more see this article.