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Argentine oil takeover heads toward final vote

03 may 2012, 16:24
Argentina's takeover of Spanish-owned oil company YPF headed for a final vote in Congress on Wednesday, sealing a measure that has roiled the country's trade ties with Europe, AFP reports.

Hugely popular in Argentina, the bill pushed by President Cristina Kirchner passed the Senate last week with a crushing 90 percent margin, and was expected to sweep through the Chamber of Deputies with broad support from the main opposition parties.

A vote in the 257-seat lower house was not expected before Thursday because of the large number of lawmakers who had signed up to speak about it in a debate that began at 1900 GMT.

"We estimate that at the moment of the vote, we could reach 200 votes in favor," said Agustin Rossi, the head of the ruling Peronist bloc in Congress.

He praised "the intelligent political decision of the opposition blocs to support this initiative of the government."

The move would see Argentina officially seize control of Spanish energy company Repsol's 51-percent share in YPF, a former state oil company that was privatized in 1992.

Kirchner argued that the move was justified because Argentina faces sharp rises in its bill for imported oil, and Repsol has failed to make agreed investments needed to expand domestic production.

Spain, the European Union and international organizations, however, have harshly criticized the measure, warning that it puts Argentina's overall trade and investment relations in jeopardy.

The Spanish press said the expropriation of YPF could set a precedent for full, simple nationalizations in the region, after Bolivia announced it was nationalizing a Spanish-owned electric power company.

The Argentine law would divide up 51 percent of the company now controlled by Repsol between the federal government and Argentina's oil-producing provinces.

A private Argentine group, Peterson, would retain a 25 percent share in YPF, and Repsol would be left with nearly 6.5 percent. The remainder of the shares will be publicly traded.

YPF accounts for 34 percent of Argentina's domestic oil production, 25 percent of domestic gas production and 54 percent of domestic refining, according to the Argentine Oil Institute.

Repsol said it will seek at least $10 billion in compensation for its expropriated shares, as well as international arbitration to settle the claim.

Argentina counters that Repsol is leaving a $9 billion debt, while in just over a decade it earned more than $15.7 billion, most of it sent overseas and not reinvested.

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