BUENOS AIRES - Argentina's Senate voted in the small hours of Thursday morning to approve President Cristina Kirchner's bill to expropriate YPF SA, the country's biggest oil and gas company.
Sixty-three senators voted for the bill, three against and four abstained, leaving no doubt about the popularity of the measure.
The legislation now moves to the Lower House of Congress, where it is expected to easily pass next week.
"We want YPF as a tool for developing the country," opposition Senator Ernesto Sanz said, justifying his vote for the bill while also criticizing the government for what he said were its failed energy policies.
Last week, Kirchner asked Congress to nationalize YPF by expropriating 51% of it from the company's majority shareholder, Spain's Repsol YPF SA's.
Kirchner accuses Repsol of underinvesting in exploration and production, which she said has forced the government to import billions of dollars of fuel every year. This, in turn, has turned Argentina into a net energy importer for the first time in 17 years, she said.
Over the past decade oil and gas production has plummeted amid soaring demand and insufficient investment.
But Repsol has rejected the government's claims and noted that YPF has invested far more than any other company in the industry, where production has fallen across the board at most companies. YPF invested about $3 billion in 2011 and was on track to invest even more this year. Repsol also noted that government officials, including the state's representative on YPF's board, had formally approved of the company's plans for years.
YPF's expropriation seems likely to lead to a long legal battle between Repsol and the government, which has scoffed at Repsol's claims that the company be compensated about $10 billion for its shares.
YPF was a state-run company until it was privatized in the 1990s.
Copyright (c) 2012 Dow Jones & Company, Inc.
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