Y P F Sociedade Anon (NYSE:YPF)
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Argentina moved a step closer to formerly expropriating a controlling stake in its largest oil and gas company, YPF SA (YPF, YPFD.BA), after Lower House committees approved the takeover legislation late Thursday.
The bill, which the Senate approved with broad support from the ruling Peronist movement and most of the opposition in the early morning hours of Thursday, will be debated before the full house next Wednesday.
Passage is almost certain given the Peronists have a working majority in the Lower House and the takeover is also backed by most opposition parties.
Last week, President Cristina Kirchner asked Congress to approve the expropriation of a 51% stake in YPF from Spain's Repsol YPF SA (REP.MC).
Kirchner and her ministers accuse Repsol YPF of not investing enough in its Argentine subsidiary to reverse years of declining output that have turned Argentina into a net energy importer for the first time in nearly two decades.
Argentina's National Appraisal Court will determine what compensation, if any, Repsol YPF will receive. Government ministers in recent days have hinted the Spanish firm might not receive anything if YPF's environmental liabilities are taken into account.
Repsol YPF, whose stake in YPF will fall to about 6% after the takeover, has said it will fight the takeover in the courts. The Spanish government has threatened trade sanctions against Argentina in retaliation.
The measure enjoys broad popular support in Argentina. Founded in 1922 as a state-run company charged with developing the country's oil deposits, YPF quickly become one of Argentina's largest, and most iconic, firms.
A poll carried out by respected pollster Poliarquia Consultores and published in newspaper La Nacion last weekend, showed that 62% of Argentines "agree with the announced plans," while 31% disagree with them.
The Kirchner administration has already seized operational control of YPF through a presidential decree that took effect April 16, the same day Kirchner announced the nationalization.
Eager to remind Argentines of YPF's glory days before it was sold to private investors in the 1990s, the government has resurrected the company's old logo and moved quickly to boost production and seek out joint venture partners.
In a statement Thursday, YPF's government management team said it has increased gas production 5% and oil production 0.7% since taking the reigns of the company.
YPF's shares traded in New York rose 5.1% to close at $13.99 on Thursday.
-By Ken Parks, Dow Jones Newswires; 54-11-4103-6740, firstname.lastname@example.org