Madrid - An incensed Spain threatened swift economic
retaliation against Argentina on Tuesday after it seized control of YPF, the
South American nation’s biggest oil company, in a move which pushed down shares
in Spanish energy giant Repsol, the major shareholder.
Madrid called in the Argentinian ambassador in a rapidly
escalating row over the nationalisation order by Argentina’s populist and
increasingly assertive president, Cristina Fernandez, a move which delighted
many of her compatriots but alarmed some foreign governments and investors.
Promising action in the coming days, Spanish Industry Minister Jose
Manuel Soria said: “With this attitude, this hostility from the
Argentine authorities, there will be consequences that we’ll see over
the next
few days.
"They will be in the diplomatic field, the industrial field, and on
energy.”
Repsol said YPF was worth $18bn as a whole and it would be
seeking compensation on that basis, but the Spanish oil major’s shares fell by
more than 8% in Madrid early on Tuesday morning.
Repsol described Argentina’s move as “clearly unlawful and
seriously discriminatory” and said it would take legal action.
“This battle is not over,” Repsol chairperson Antonio Brufau
said.
But Fernandez dismissed the risk of reprisals. “This
president isn’t going to respond to any threats... because I represent the
Argentine people. I’m the head of state, not a thug,” she said.
Spanish media condemned the Argentinian action, believed to be
the biggest nationalisation in the natural resources field since seizure of
Russia’s Yukos a decade ago.
'The new Evita'
Right-wing newspaper La Razon carried a photograph of
Fernandez on its front page in a pool of oil with the headline: Kirchner’s
Dirty War, referring to her full name.
The business newspaper La Gaceta de los Negocios branded the takeover “an act of pillage”.
On the left, El Periodico spoke of “The New Evita”, pointing
out that Fernandez had announced the nationalisation in a room decorated with a
portrait of Eva Peron, the actress who was married to a president and revered
by many Argentineans for her populist politics.
YPF has been under pressure from Fernandez’s centre-left
government to boost production, and its share price has plunged in recent
months on speculation about a state takeover.
Fernandez said the government would ask Congress, which she controls, to approve a bill to expropriate a controlling 51% stake in the company by seizing shares held exclusively by Repsol, saying energy is a “vital resource”.
“If this policy continues - draining fields dry, no
exploration and practically no investment - the country will end up having no
viable future, not because of a lack of resources but because of business
policies,” she said.
YPF’s market value is $10.6bn, although an Argentine tribunal will be responsible for valuing the company as part of the takeover. Central bank reserves or state pension funds could be used for compensation, analysts say.