With the takeover of YPF by Argentina from Spanish oil giant Repsol has sparked new speculations over the investment climate in Argentina.
After the revival of its economy and having the third largest economic size among South American countries Argentina is now seeking to secure and procure the various lost opportunities which the nation lost because of the loopy investment policies. With Fitch warning Argentina about its growing isolation in diplomatic community and crumbling investment channels, the president ‘Christiana Fernandez’ approves her decision to the ‘YPF’ take over from ‘Repsol’, and converting privately running firm to 100% nationalized public enterprise by saying [that] “We are the only country who do not control its own oil company”…
“We need to maintain our hydrocarbon sovereignty,” she said while attending a ceremony in the province of Buenos Aires.
She also admitted she was “nervous and anxious” during the YPF announcement last week because her late husband Néstor Kirchner “could not be present during such a significant moment”.
“Yes someone told me they had never seen me so nervous: it is true I had never been so nervous. But it was not because of doubts or uncertainties, quite the contrary I’m convinced this is the only possible path. I was anxious and nervous precisely because I would have loved to be next to him (Nestor Kirchner)” admitted the president.
“It’s true I was anxious and nervous because the speech, because I felt I really needed him to be there”.
In one of her recent speech the Argentine president is now going high on nationalization of the Argentina’s natural resources on which she says [that]… It’s time that Argentine now controls their natural resources”. “We need to defend them for all Argentines: this is the true and final objective. We’re not snob environmentalists but rather because we want to conserve them for future generations”.
Likewise from Buenos Aires Interior Minister Florencio Randazzo assured that the consequences of the expropriation of YPF will be “absolutely favourable for the country’s development,” adding that they will be seen and enjoyed “by future generations.”
“We’re certain that surely the consequences of this decision will be seen and enjoyed by the future generations, and will be absolutely favourable for the country’s development,” he said.
Randazzo’s statements came in response to European Commissioner for Trade Karel de Gucht’s assurances that Argentina “will suffer the consequences for a long time in its own economic development.”
However the growing crisis of Argentina’s political isolation and aftermath of its tyrant regulating policies which are now becoming the bone of contention between the Argentine government and WTO amid concerns to its anti trade practices which are not only discouraging local Argentine businesses but also keeping foreign investors at bay.
As Argentina moves forward with its aggressive waves of new reform process it faces the challenges with the fast changing globalised world the country needs to choose its strategies and dialogue partners carefully. With China being a front runner and the most reliable long term investor who’s 40% of the entire regional oil investments went to Argentina might change the game of Argentina and can bring the ball in court of Argentina’s favor where it can bank upon the role which this nation can play at the centre stage on a global platform.
With American oil analysts and investment pundits applauding Argentina’s Patagonia and The Pampas as the global hub of shale production where it provides it with the world’s largest reserves of this resource which is being considered as the next generation of the oil industry that fuels the growth of world engines. A U.S. Department of Energy report shows Argentina holds more natural gas trapped in shale rock than all of Europe does -- a 774-trillion-cubic-feet bounty that could transform the outlook for Western Hemisphere supply.
It put Argentine shale gas reserves several times higher than previous estimates, behind only China and the United States, where shale drilling is already key to energy supplies.
"Oil companies are constantly operating in turbulent environments, in problematic countries," local energy analyst Victor Bronstein said. "If they think there's a business opportunity, that there's a possibility of resources, they'll dive in."
But Randazzo said that Argentines “will enjoy the consequences of this decision” which is directly related to this “virtuous model, which returns the management of our national resources to the state and to the people.”
“There’s no country in the world that has transferred the management of hydrocarbons to the private sector,” and added that Argentina “is still undergoing an industrialization process and needs to be able to manage a strategic resource such as the hydrocarbons,” he explained.
“Argentina made a sovereign decision. And there’s a group of Spanish businessmen defending their economic interests, but this company does not belong neither to the Spanish people nor the Spanish government,” he added.
The national spirit is so high in hearts and minds of Argentines that even after losing the Falkland war with Britain and facing international criticisms from around the world about his actions the nationalism doesn’t dies out. The recent rows of threats and diplomatic upheaval between the two nations; Argentina has not stopped its threats to the companies operating in Falkland Islands which comes, and are served under the British overseas territories department.
Though these steps and actions discussed about the concerns of Argentina at large may be right in their own respect as a nation but when it comes to the transparency of the laws and security of the FDI flowed by the foreign firms must be provided with guarantees by the government so that the interests of the investors must be made secure which also prevent Argentina from further isolation from the international diplomatic quarters.
Nationalism is one of the greatest pillars of forming ones nation but if not controlled and guided without giving a proper direction may lead to serious faltering of the foundations of the very country.
The Oslo Times
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