Tuesday, May 8, 2012

Cristina Kirchner's Populism Regarding Repsol-YPF

Following two days of debate, the Argentine Chamber of Deputies passed the nationalisation bill regarding YPF on May 4th 2012 with a majority of 208 votes – 81 per cent of the house – after the Senate had paved the way for approval last week by also voting in favour. In both houses, the bill was backed by the overwhelming majority of opposition parties. A giant banner of Néstor Kirchner was draped from the upper balconies of the chamber of deputies. The expropriation of YPF is a fact now, but the story is far from finished yet. This developing saga is perfect to illustrate Argentine politics and populism...

Wednesday, May 2, 2012

The History of Expropiations of Oil companies in Latin America

The partially renationalisation of Repsol-YPF has been in the news recently. It is quite interesting to take a closer historical look at the privatizations, recapitalisations and expropriations of National Oil Companies (or the whole domestic oil industry) in Latin America. Privatisations as well as expropriations are often presented as populist and nationalistic measures by politicians, using false arguments. Privatizations are often executed by (neo-)liberal governments because State owned oil companies got too bureaucratic, too slow and too inefficient. Expropriations are often executed by socialist governments, because the government thinks oil companies are making too much profit and the state is getting too little royalties. After expropriations State owned Oil companies often have to pay too much taxes, do become a major source of revenue for the government's budget and are usually heavily indebted, which leaves very little money for investments. Some oil companies have even experienced several privatizations and expropriations cycles. Let's illustrate this with a concise review of the most significant LatAm National Oil companies: