Argentina Nationalises YPF

Also the Argentinian central bank head just said printing money does not lead to inflation: http://en.mercopress.com/2012/03/26/printing-money-does-not-lead-to-inf…

Country clearly is on the right track.

lol and apparently the central bank head has a Masters degree in economics from Yale. What do they teach over there?

"The seizure of YPF would be the biggest renationalisation in the natural resources industry since the Russian government took control of Yukos in the early 2000s." -FT.com http://www.ft.com/intl/cms/s/0/ae91248c-87e0-11e1-b1ea-00144feab49a.htm…

This is madness. First we had the Falklands nonsense, then the inflation figures fiasco and now this. Kristina's administration is displaying all the symptoms of desparation. No different to Africa's deranged Mugabe.

Hello short positions.

Argentina has been pissing other nations off for at least 150 years now. This latest episode should come as no surprise.

Well bang goes there Falklands application to the UN

I would short, but i really dont ever want to own the argentine currency, and buying assets will probably get seized.

I saw this and at first didn't believe what I was reading. I had to check the date to make sure it wasn't a belated April Fool's joke. She is out of her damn mind. I know the Spanish have all sorts of problems, but I highly doubt they will take this sitting down. You don't screw with oil assets. Ever. Great way to kill any prospect of foreign investment in your country. Anyone down there able to provide local color on the topic?

Im not a local, but it seems like some people are celebrating --> http://www.euronews.com/2012/04/17/celebrations-in-buenos-aires-over-yp…

Many Argentine supporters see wrestling control of one of the country’s largest oil producers from Spanish hands as a strike against an imperialist past.

That is a very troubling passage to me, considering I'm seeing headlines flashing across my screen about outrage in Spain. Last time I checked they had a lot of unemployed people who have little better to do than get pissed about something to get their minds off the state of their shitty economy. I would be slightly concerned if I were Argentina. Not that I think they will actually physically do anything to them, the precedent it sets really could destroy the investment appetite in that country (as if rampant inflation wasn't enough).

Where is Diamond Lil's input on this? Being the go to Argentina coorespondent.

Investors are being compensated, but probably at a discount. Those hoping for a war with Spain or saying Argentina should be worried are probably engaging in too much wishful thinking.

Argentina is looking like a classic repeat of Atlas Shrugged. The country will probably be without a currency ala Ecuador before this is over. The next shoe to drop after the currency will be the unions- since they can't get paid- and Kirchner gets voted out.

Argentina seems to be on a path back to where it was ten years ago, maybe worse. Oh well, at least Americans now have a country to point to and say "We're not stupid. You want stupid? THERE! THERE'S STUPID."

loled hard at IP's final line. Fascinating stuff though, teach them to harbour all those german farmers in the 50's.

Welcome to Venezuela 2.0 (but without the social programs!)

The real question none of you are trying to answer is what should they do given their current circumstances? What are their options and what would give their people the most favourable outcome?

Argentina is NOT nationalizing YPF (at least, until now..). YPF is becoming a mixed company(public and private) like petrobras. They r going to buy the 51% that belongs to repsol, so the only investor that will be compensated is repsol. The rest can still participate, or sell it.

well, in terms of keynesian nonsense economic stuff, it seems that wall st. people love that.. QEI, QEII, possible QEIII??, LTROs..... print print print!!!!so we can get another "free put"

Argentina is NOT nationalizing YPF (at least, until now..). YPF is becoming a mixed company(public and private) like petrobras. They r going to buy the 51% that belongs to repsol, so the only investor that will be compensated is repsol. The rest can still participate, or sell it.

well, in terms of keynesian nonsense economic stuff, it seems that wall st. people love that.. QEI, QEII, possible QEIII??, LTROs..... print print print!!!!so we can get another "free put"

nice post??? haha. 70% of the post was pure crap... come on, if u dont know the history dont lie. first of all, dictatorship in the 80s??argentina was not chile, dictatorship in argentina was between 76-83, and in the earlys 80s they were so busy with other things, some stupid war. 2) the biggest loss in history??? $8Bn.???? WTF??? YPF and another company, a bank, were the only state-owned companies that didnt show any loss in the 80s and early 90s... and im not going to say anything else about what happened in the late 80s and the 90s in LATAM because i can see that u have no idea! 3) as you said, they bought almost 100% of the company, and sold more than 1/3 of the company. but do u have any idea how they bought it?? or do u have any idea how they sold it to the "rich family"?? ooohhh u said that they were not allow to pay dividends, so i can see, again, that u have no clue! 4 )"They weren't allowed to take any of the profits out of Argentina AND they weren't allowed to pay dividends" ????? where did u find that???? u should chek out repsol web page and you will find out how many times per year they used to pay dividends in the last 11 years... and repsol used to take the profits out of argentina every single year (legally of course) until december 2011... 5) Now, they have found one of the biggest oil fields in South America in Argentina, and what happens?? NOW???Again, repsol didnt find anything. everybody in the latam energy sector knows about that field since a long time ago... many years ago, the problem was the technology that is necessary... and now that repsol didnt want to invest that money 6) Repsol claimed $10 Bn. NOT $8Bn. We all know that their % doesnt worth it, check out ypf stock price and the market will give us the fair value of the company. lol and u r right, they turn the company around, they dont produce, they have less reserves, and they used to "invest" a boat load of money....sure.... lastly, who is going to sell it again???? no one wants that. as you may know, government oil companies owns 80% of oil and gas reserves of the world... nobody forgets the 90s (privatization process) in most of latam countries, argentina is not going to fall on that lie again, specially when we r talking about natural resources.

legally, ypf still being a private company where the major holder is the government but not the only owner, thats why i said some kind of mixed company. companies where the state is the only owner works out in a completely different way, at least in LATAM, russia, india. FYI, YPF was like petrobras, the difference is how ypf was "entirely" sold to repsol, and there u will find out how they become the legal(?) owner...

The one who is missing the historical context is you, coz u have no idea what u were talking about. all that u wrote down is BULLSH.....T with wrong facts. but gotta admit something, u have a great future as a journalist, specially in murdochs media. with 2 3 things, u were able to write an amazing drama book.lol so i hope u can do a better research next time mate! i can help with some books and papers if u want

The problem with insulting someone is that if you have no idea like yourself is that you end up looking like an idiot. I'm not going to anser your opinions about privatization, because I can't be bothered, but since you insulted me providing absolutely no facts whatsoever in your post, I'm going to give you the facts so you don't fill this forum with your propaganda:

1)1983 is the 80s.

2) I said it was doing crappy in the 80s, because of the dictatorship. When in 1981 General Suarez Mason took charge of YPF after the death of Ondarts, he put all of his friends from the military in the executive roles. Together they diverted oil to Sol Petroleo, a company that they used to divert funds to organizations like P2, the fascist organization he was a part of. And that's proven in a court of law. He borrowed so heavily he multiplied the company's debt by 145. Yes, 145x more leverage. In 1983, the company posted a loss of $6.5Bn, the biggest loss at the time. And in 1983 there was a dictatorship and it's in the 80s, so my statement is 100% correct.

3) Yes, I know how they bought it. They bought 15% from the national government and 10% from the provinces, and the rest from investors. Yes, I also know how they sold it to the Eskenazi's. 15% in 2007 and 11% in 2011, literally one year ago. If what you meant by this is the fact that the government kept the Golden Share, you are correct. However, Argentina's GS in YPF only allows them the power to VETO. So they can veto decisions that are not in the best interest of Argentina, but they can't make and pass their own decisions. Like forcing the shareholders to sell for instance. Read the fucking agreements before you insult someone ;-)

4) I said YPF doesn't pay dividends (again, veto power from the golden share). Your answer is that Repsol does. Ok fine so fucking what? Let me explain to you how it works. YPF is a publicly traded company of which Repsol owns 57%. Repsol is a DIFFERENT publicly traded company. Repsol wanted YPF to pay dividends, because they own 57% of the shares, that would mean they get a paid a serious amount of money. And the same goes for profits. All the profits obtained from Argentina had to be reinvested in Argentina.

5) We must not be talking about the same field, since it was found months ago. The problem was that Repsol wanted to exploit and make profits, whereas Argentina wants it because they are fucking bankrupt and now they can save some cash in oil imports.

6)They claimed €8Bn, not $8Bn. You are correct about that, my bad. Confused the currencies. However your argument is based on current stock price, which is quite ridiculous. Find me a takeover where the acquirer paid market value for each stock please. Seriously, do you know anything about finance? Oh, and by the way, the stock is now at around $14.5, but before all the rumours it was around $41 (Jan this year, 3 months ago). And the highest price in the last year was over $46. That would give them a market cap of around $18.5Bn. 51% of that is $9.5Bn. So I'd say Repsol is not that far off....

7) Legally YPF is not a private company where the major holder is the government. Legally YPF is a public company that trades in the NYSE and whose owner is Repsol because they own more than 51% of the shares. The government has a minor share with SPECIAL VOTING rights. The Golden Share allows them to veto, and only under special circumstances. Those circumstances are not the case, and they are not vetoing anything, so they are doing something illegal.

Tyncho, are you in any way affiliated with the argentinian governament ? It looks like youve been well brainwashed

Well, that was quite an obliteration.

And you guys thought Uncle Sam had nothing to do with this renationalization?

Argentina is a huge joke... They are basically "stealing" (since they are not paying fair price) a whole company... That's crime in a whole different level.

I am from Brazil and I am scared this gives ideas for Mrs. Rousseff... Inflation numbers here are starting to get weird... Government intervention everywhere (Petrobras can't raise their gas prices, Vale being taxed $30 bn), a crazy Finance Minister... Trade idea: Short BZA (or EWZ, in dollars) Index.

Ok, lets see: 1) Again, your statement is not 100% correct...First the problem didnt start in 1981 with suarez mason. It started in 76 with militars. It just got worse during the 80s. The losses that you are talking about were because of the debt, they borrowed so heavily that the debt multiplied by 16...not 145. yes it is a lot! but why??? that money was mainly destinated to finance argentinean and foreign companies who supported the dictatorship and "hide" the crimes that they committed, at which price?? remember that in the early 80s, militarys transfered the private debt to the state. yes nationalization of the debt. oh, and it is proven in a court of law that this debt it is illegal. you can search sentencia Olmos/causa Olmos, maybe you can find something in english. one of the biggest ripoff ever! sponsored by our dear friend, the IMF (it is proven in a court of law too). what a coincidence, 1982/1983 were also the years of the biggest nationalization of the private debt After and before those awful years YPF has always been profitable. So your point is something like "ten years ago this company was destroyed by the dictatorship and wasnt efficient and profitable so we have to sell it" ok, but now, in recent years, has been profitable. and even more when Estenssoro (he was against a complete privatization of YPF, and tried to turn YPF in a company like petrobras is now) was named by the menem administration as the new CEO. "eeehhh it doesnt matter, we have to sell it because during the militarys government it wasnt efficient and productive" IT has NO sense at all!! 2) well you should also know that the first part of the privatization was sold(not to repsol) at half the price according to the balances. with the petersen group i wont say anything...its just unbelievable, they bought 25% of YPF with one dollar! lmfao 3) Again, YPF does pay dividends, tell me where did you find that it doesnt????? I said go to repsol web page, coz you can find the info about YPF. ok go to YPF, or any finance web site. They used to pay dividends for almost 100% of the profits. give you one fact, in the last 3 years, ypf profits were something like $3,5 Bn but they remittances abroad were more than $4,3 Bn. it really seems that they are reinvesting in argentina... one more, in the last decade they used to execute an average of 30 explorations per year. but the 2 decades before the average was 150 exploration per year. remember that oil companies need to invest a lot of money in exploration in order to increase your main active (oil reserves). And oil reserves and production has been decreasing since 1999, what a coincidence again! Thank you Repsol and Kirchner!! 4) Im pretyy sure u are talking about LLL, and that oil field wasnt found some months ago. It was found 40 YEARS ago! Ypf tried to start producing there but the technique was kind of complicated for that time. Only china and usa use this kind of technique. so they didnt discover anything, they started the exploitation. also, i can tell you a couple of places where they can say that they "found" bigger oil reserves... oh forgot they were about to say it but... And it is true kirchner is so fucked up but not because of bankrupt. theres something else, some kind of emptying (?) policy that they hide it... 6)a takeover where the acquirer paid market value? Easy, and surprising... Venezuela when they nationalized SIDOR. and im wrong, chavez si so smart that he paid more!!lol you see, nice strategy: lets revoked some oil fields grants (or concessions?), so the stock price is going to fall!! and you know why they can do that?? because natural resources belong to the sovereign countries(its in their constitution), it doesnt belong to a corporation!! 7) Sorry my mistake, when i said public I meant government owned company, and for private company is what you described as public. and yes im sure repsol had never done anything illegal... they are so nice and good boys! But I agree in one thing, there was a better way of getting ypf back

Finally im not insulting you, dont be so susceptible, im just saying that what you are saying is crap: - invest a boat load of money and turn.... BULLSH.....T - they werent allowed to take any profits out of the country..BULLSH... - not allowed to pay dividends....... BULLSH..... - they found some oil fields..... BULLSH...... - your historical context, defending a privatization with a stupid argument like ypf is not efficient they loose money!!

Ok, lets see: 1) Again, your statement is not 100% correct...First the problem didnt start in 1981 with suarez mason. It started in 76 with militars. It just got worse during the 80s. The losses that you are talking about were because of the debt, they borrowed so heavily that the debt multiplied by 16...not 145. yes it is a lot! but why??? that money was mainly destinated to finance argentinean and foreign companies who supported the dictatorship and "hide" the crimes that they committed, at which price?? remember that in the early 80s, militarys transfered the private debt to the state. yes nationalization of the debt. oh, and it is proven in a court of law that this debt it is illegal. you can search sentencia Olmos/causa Olmos, maybe you can find something in english. one of the biggest ripoff ever! sponsored by our dear friend, the IMF (it is proven in a court of law too). what a coincidence, 1982/1983 were also the years of the biggest nationalization of the private debt After and before those awful years YPF has always been profitable. So your point is something like "ten years ago this company was destroyed by the dictatorship and wasnt efficient and profitable so we have to sell it" ok, but now, in recent years, has been profitable. and even more when Estenssoro (he was against a complete privatization of YPF, and tried to turn YPF in a company like petrobras is now) was named by the menem administration as the new CEO. "eeehhh it doesnt matter, we have to sell it because during the militarys government it wasnt efficient and productive" IT has NO sense at all!! 2) well you should also know that the first part of the privatization was sold(not to repsol) at half the price according to the balances. with the petersen group i wont say anything...its just unbelievable, they bought 25% of YPF with one dollar! lmfao 3) Again, YPF does pay dividends, tell me where did you find that it doesnt????? I said go to repsol web page, coz you can find the info about YPF. ok go to YPF, or any finance web site. They used to pay dividends for almost 100% of the profits. give you one fact, in the last 3 years, ypf profits were something like $3,5 Bn but they remittances abroad were more than $4,3 Bn. it really seems that they are reinvesting in argentina... one more, in the last decade they used to execute an average of 30 explorations per year. but the 2 decades before the average was 150 exploration per year. remember that oil companies need to invest a lot of money in exploration in order to increase your main active (oil reserves). And oil reserves and production has been decreasing since 1999, what a coincidence again! Thank you Repsol and Kirchner!! 4) Im pretyy sure u are talking about LLL, and that oil field wasnt found some months ago. It was found 40 YEARS ago! Ypf tried to start producing there but the technique was kind of complicated for that time. Only china and usa use this kind of technique. so they didnt discover anything, they started the exploitation. also, i can tell you a couple of places where they can say that they "found" bigger oil reserves... oh forgot they were about to say it but... And it is true kirchner is so fucked up but not because of bankrupt. theres something else, some kind of emptying (?) policy that they hide it... 6)a takeover where the acquirer paid market value? Easy, and surprising... Venezuela when they nationalized SIDOR. and im wrong, chavez si so smart that he paid more!!lol you see, nice strategy: lets revoked some oil fields grants (or concessions?), so the stock price is going to fall!! and you know why they can do that?? because natural resources belong to the sovereign countries(its in their constitution), it doesnt belong to a corporation!! 7) Sorry my mistake, when i said public I meant government owned company, and for private company is what you described as public. and yes im sure repsol had never done anything illegal... they are so nice and good boys! But I agree in one thing, there was a better way of getting ypf back

Finally im not insulting you, dont be so susceptible, im just saying that what you are saying is crap: - invest a boat load of money and turn.... BULLSH.....T - they werent allowed to take any profits out of the country..BULLSH... - not allowed to pay dividends....... BULLSH..... - they found some oil fields..... BULLSH...... - your historical context, defending a privatization with a stupid argument like ypf is not efficient they loose money!!