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EU’s Barroso warns Argentina over oil company control

18 April 2012 10:52 (UTC +04:00)

Baku - APA-Economics. European Commission President Jose Manuel Barroso said on Tuesday he expected Argentina to uphold international agreements on business protection with Spainover its plan to take over the Argentine unit of oil major Repsol.

Argentinian President Cristina Fernandez de Kirchner has unveiled plans to seize control of the country’s biggest oil company YPF, owned by Spain’s Repsol, provoking an angry response from Madrid.

The announcement on Monday drew swift warnings from key trade partners, who said that relations with Buenos Aires would be damaged by the move.

YPF has been under intense pressure from Kirchner’s centre-left government to boost production, and its share price has plunged due to months of speculation about a state takeover.

"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.

"We emphasise the need for mutually agreed solutions which do not harm the business environment," Barroso told reporters.

"Thus I am seriously disappointed about yesterday’s announcement. We expect Argentinean authorities to uphold their international commitments and obligations, in particular those resulting from a bilateral agreement on the protection on investments in Spain."

Kirchner said the government would ask Argentina’s senate, where her party controls a majority, to approve a bill to expropriate a controlling 51 per cent stake in the company by seizing shares held exclusively by Repsol, saying energy was a "vital resource".