Argentina backs off plan to privatize YPF

Argentine president Javier Milei's administration no longer plans to privatize the state-owned oil company, YPF, as part of a huge government overhaul.

The decision on YPF is part of a series of changes to Milei's omnibus reform bill to help get it through congress in the coming days.

Congressional leaders on 22 January presented an updated version of the bill, which was submitted in late December. The new draft removes 141 articles from the original 664-article proposal and modifies many others, including in the energy sector.

The administration would like to have the legislation through committees by 26 January so that it can be approved by the full congress before 15 February.

The president, in an interview with a radio station on 22 January, said the government "did not concede anything, but made improvements" to the legislation.

YPF has been at the center of a decade-long legal battle that is coming to an end. Last September, Judge Loretta Preska, of the US District Court for the Southern District of New York, ruled that Argentina would have to pay north of $16bn in principal and the rest in interest for a 2012 decision to nationalize the company.

Preska ruled in favor of Petersen Energia Inversora and Eton Park Capital Management, which were minority shareholders in YPF when the state took control from Spain's Repsol. The judge rejected in early January a request to stay the ruling, effectively allowing the creditors to put a lien on YPF.

The exclusion of YPF was not the only modification to the energy sector. Also removed from the privatization block was Nucleoelectica Argentina, the state-run nuclear power company.

The new version also modifies article 258 that eliminates most regulations for the production, transportation and sale of oil and gas. While the government cannot set prices, the updated bill lets the state intervene if there were to be a problem guaranteeing oil or gas supply.

By Lucien Chauvin