Argentina’s Seizure of Oil Giant YPF Sparks Outrage
A YPF gas plant in Buenos Aires. (DANIEL GARCIA/AFP/Getty Images)
April 24, 2012
| Economics, Energy
| Europe, The Americas
Argentina has a history of seizing foreign property. In the early 1980s it invaded the Falkland Islands, triggering a war with Britain. Now, it has taken control of YPF, the nation’s largest oil and gas company, which is (or at least was) owned by Repsol, a Spanish energy conglomerate. While blood is not likely to be spilled this time around, LIGNET sees trouble on the horizon for the rapacious, buccaneer Buenos Aires government that shamelessly breaks contracts.

While Argentina will benefit in the short term from what amounts to theft on a grand scale, it will likely suffer a heavy price in the years to come for its rash action last week. The risk for foreign investors, already high to begin with, has now risen dramatically at a time when Argentina is in desperate economic straits. Reprisals from the European Union are a real possibility as Spain seeks to regain up to $10 billion in financial losses.

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