Nationalisation in Argentina

[Wahalla]

since Monday Repsol shares fell 20 % on the Madrid stock exchange when it was announced on Friday... I took advantage and bought some!
given that I have faith that they will hit oil in Cuba!

YPF move finds domestic support

Argentina's drive to seize control of leading energy company YPF from Spain's Repsol may have outraged European trade partners and foreign investors, but many ordinary citizens hailed it as virtually heroic.
The move by combative President Cristina Fernandez appealed to Argentines who are critical about the vagaries of global finance and the controversial privatizations of the 1990s, a decade remembered for rampant corruption and factory closures in Latin America's No. 3 economy, Reuters reported.

Fernandez loyalists pasted "Thank You Cristina" posters on government buildings in the capital Buenos Aires and supporters of the expropriation drive praised the president's boldness.

"It's about recovering what's ours," Julio Olaz, a passerby in downtown Buenos Aires, told the news wire. "We need to get together and make sure Argentina belongs to Argentina and not to foreigners."

The takeover move could help Fernandez regain the political initiative after a series of unpopular policy moves and a corruption probe involving her vice president that have eroded her approval ratings since her landslide re-election in October last year.

Fernandez, faced with a widening energy shortfall as Argentina's fuel import bill surges, says her only concern is protecting the national interest by guaranteeing future energy supplies and righting the wrongs of the free-market policies widely blamed for precipitating a sharp economic crisis and debt default in 2001/02.

"Companies that operate in Argentina, even when their shareholders are foreign, are Argentine companies. Don't anyone forget that," the fiery Fernandez said on Monday, standing beside an image depicting famous first lady Evita Peron, to whom fellow Peronist Fernandez is sometimes compared.

Argentina's move on YPF, which was fully state-owned for 70 years before its privatization, is thought to be one of the biggest takeovers in the natural resources field since the seizure of Russia's Yukos oil giant a decade ago.

But it follows a steady trend toward resource nationalism in commodities-rich Latin American countries governed by leftists such as President Hugo Chavez of Venezuela and Bolivian President Evo Morales, both close allies of Fernandez.

Chavez applauded her move and rejected European "threats and efforts at intimidation."

In Mexico, where there are increasing calls for more private involvement in state-owned Pemex, leading presidential candidates said Tuesday that Argentina had made the wrong move, Dow Jones reported.

"It doesn't seem to me the best way to promote investments and confidence in the country," said front-runner Enrique Pena Nieto of the Institutional Revolutionary Party, or PRI, at the World Economic Forum's Latin American event in Puerto Vallarta.

Conservative candidate Josefina Vazquez Mota, of the ruling National Action Party, or PAN, said expropriation leads nowhere and goes against globalization rules.

"We expropriated the banking system, and Mexico is still paying the consequences today of low growth," Vazquez Mota said at the same event. Mexico's banks were nationalized in 1982 and reprivatized in the early 1990s.

Mexico's oil industry was expropriated in 1938, and no private or foreign investment is allowed in upstream oil and gas activities except under contract to state oil monopoly Petroleos Mexicanos, or Pemex. There are no private oil and gas concessions.

Pemex has a 9.5% stake in Repsol, and recently signed a 10-year industrial alliance with the Spanish company.

[Wahalla]

Re: Nationalisation in Argentina

I find this ironic... Repsol are drilling in Cuba the bastion of nationalisation...... And their assets get nationalised in Argentina the bastion of liberal economics..Bee interesting though if the Chinese work the Respsol claim givine thate they are parnterns in south china sea projects!


Argentina Seeks Partner for YPF to Invest $10B
by Dow Jones Newswires|Enza Tedesco|Thursday, April 19, 2012






The Argentine government is looking to seduce major international oil companies to invest some EUR8 billion, or about $10 billion, in the country's energy sector with YPF SA, just days after it moved to nationalize YPF, the Argentine unit of Spanish oil company Repsol YPF SA, reports Expansion in its Thursday Internet edition.

The investment won't have to necessarily entail the purchase of YPF shares, but there could be alliances for specific projects or the creation of a joint venture, the newspaper says.

China Petroleum & Chemical Corp, known as Sinopec, and CNOOC Ltd. are the main candidates, the paper adds.

Recent press reports said that Sinopec had already reached a nonbinding agreement with Repsol to purchase a controlling stake in YPF before Argentina moved ahead with its nationalization plans.

[Wahalla]

Re: Nationalisation in Argentina

And it turns out I met the new head of YPF a couple times in London....



By Kathrine Schmidt and news reports
07 May 2012 21:08 GMT
Former Schlumberger executive Miguel Galuccio is taking his first steps as head of Argentina’s YPF after Congress approved the government’s seizure of its biggest energy company.
Galuccio, 44, was named general manager of Buenos Aires- based YPF late on 4 May, one day after Congress approved Fernandez’s proposal to take a 51% stake in the company from Spain’s Repsol, Bloomberg reported.

According to the Buenos Aires Herald, Galuccio on Monday hosted his first official meeting employees at the company’s Comodoro Rivadavia plant, telling them a new strategic plan for the company would be ready within the next 100 days.

“You can only imagine how proud I am and what this means to me,” the engineer said according to the newspaper.

“We want an YPF nationally-oriented, competitive, modern, capable of giving out good results to its stakeholders, a leader in the energy industry development.”

According to Bloomberg, Galuccio was president of Schlumberger Production Management in London until a month ago, will hold the position at least until a shareholders’ meeting on 4 June elects a new board.

Fernandez is counting on Galuccio to help boost production and investment that she says suffered under Repsol’s ownership, vowing that the state-run company will be professionally managed.

YPF’s American depositary receipts rallied 8.5 percent to $15.35 on 4 May after newspapers including Ambito Financiero and La Nacion reported that Galuccio would head the company.

“Clearly, YPF is embarking on the path towards becoming a Petrobras or Petrochina, where there is a state controlling the entity and its long-term vision, however the entity is run according to best industry practices and in a method that delivers profitability,” said Roy Sebag, chief executive of Natural Resources Holdings, which owns YPF shares.

Sebag said he is “very satisfied” with the choice.

Galuccio, an Argentine who worked for YPF from 1994 to 1999, met with Fernandez for the first time on 4 April, 12 days before the nationalization was announced, the president said in her speech. Galuccio had previously run the Integrated Project Management unit at Schlumberger, an oil-services company based in Houston.

“I said on 16 April, when I sent the bill to Congress, that we were going to see YPF with a totally professional profile, which doesn’t mean that it won’t have a political direction,” Fernandez said in a nationally-televised speech. “The idea is for YPF to be modern, absolutely competitive, with professionals.”

Galuccio, a petroleum engineer by training, ran Maxus Energy Corp., a US company acquired by YPF in 1995, during his previous stint at the company.

Madrid-based Repsol has demanded $10.5 billion in compensation for the seizure, a figure the government rejects. Fernandez said Argentina’s National Appraisal Tribunal will set the value of the takeover.

The government took control of YPF as it seeks to reverse years of declining output and reserves and to cut fuel imports which doubled to $9.4 billion last year. Planning Minister Julio De Vido, who oversees energy policy, and Deputy Economy Minister Axel Kicillof were named by Fernandez on April 16 to run the company.

To reverse the decline in production, YPF is seeking partners to help it to tap Argentina’s extensive shale oil and gas reserves. A 30,000-square kilometer geological formation known as Vaca Muerta in southern Argentina holds at least 23 billion barrels of shale oil, of which about 13 billion belong to YPF, the company said in a presentation in February.

De Vido and Kicillof have since met with executives from companies including ExxonMobil, Chevron and ConocoPhillips to discuss investments in Argentina.

“Argentina does not have much of a hydrocarbon deficiency, meaning that at some point, given its resource endowment which far exceeds internal demand, YPF will become a very profitable exporter of hydrocarbons,” Sebag said.

Following the seizure, Repsol has been left with a 6% stake in YPF. Argentina’s Petersen Group owns another 25% while the remainder is listed in Buenos Aires and New York.