Speech delivered by the President of the Argentine nation, Cristina Fernández de Kirchner, on April 16, 2012 to announce the presentation of a bill to Argentine Congress to re-nationalize the oil company YPF (Yacimientos Petrolíferos Fiscales, in English: "Treasury Petroleum Fields"). It is owned by a private Spanish company, Repsol. Good morning to you all.

Esteemed governors, …labor union and social leaders; managers; legislators; leaders of the opposition; mothers and grandmothers of Plaza de Mayo; young people; Argentineans

I woke up today and read in a newspaper that I had left the Summit of the Americas in anger before the end. I didn’t leave before it was over because I was angry, but because I had to be here in the Argentinean Republic first thing in the morning. There was no way that I could have left like that .

The meeting was really fantastic. There are some legislators here who were there with me. They saw the way 32 countries gave their full support to our claims of sovereignty over the Malvinas. I left at the most one hour or so before the end, or else I wouldn’t have been able to be here in Buenos Aires at 7:30 p.m. for a meeting with some officials.

At any rate, I approached President Santos to thank him for his hospitality and tell him that I couldn’t stay, without saying why, of course, and he said: "Are you aware that I’ll talk about the Malvinas in my closing speech?", and I told him, fine, I know, everything is OK, and the topic is also included in the Presidential Agenda of our sister nation Colombia and its people, whose views on and support for the Malvinas issue are quite clear and categorical. (Applause)

The official announcer has read exactly 19 articles that make up the text that I signed just a few minutes ago which will be submitted today to our Congress in almost 50 pages of detailed and well-defined facts.

But I’d like to talk to all Argentineans about what the first article of this bill is about: recovering hydrocarbons sovereignty. We’re actually the only country in Latin America, and I would say in practically the entire world, that doesn’t manage its own natural resources. However, there were even stronger reasons to make this decision.

I don’t know where the young lady who handles the PowerPoint slides is; this is my first time in front of such a PowerPoint presentation and I don’t know how it will go, but I’ll try to do it the right way.

YPF’s situation in 1999-2011: Seventeen years after a policy leading up to YPF’s privatization in 1998, in 2011 for the first time we became net importers of gas and oil, with a deficit of 3.029 million dollars, as indicated by that important red bar you see there.

It’s the first time in 17 years that we have to import gas and oil, which places this three-billion-dollar deficit in hydrocarbon production at an all-time high.

Between 2006 and 2011 our debit balance increased 150%. As you can see, we started to import millions of dollars of fuel in 1995, and then, in 2010, that amount went as high as 9.4 billion dollars.

The value of those imports almost reached our trade surplus, which lay at 10.4 billion dollars last year. Obviously, these two charts suffice to prove that if we go on with this policy – draining fields dry, no exploration and practically no investment – we will end up having no viable future and, worse yet, not because of a lack of resources but of business policies.

Argentina is the world’s third nation in terms of shale-gas reserves, which were recently discovered, after China and the U.S., as acknowledged by the U.S. oil and energy agency itself, and yet we failed to work or take advantage of our conventional gas. The section that looks like an elephant trunk shows in millions of dollars the 50% drop in our oil reserves since 2001 to date.

Despite all the figures indicating that the company was surely making a loss –as expected from a seller of oil, gasoline, gas-oil and fuel-oil if the reserves went down– it wasn’t. Despite the fall in production, YPF managed to double its sales through price rises, in millions of current dollars, up to 113% since 2003, precisely the year when we most had to import fuel. That year YPF made sales worth 12.4  billion dollars.

You probably remember the denationalization in 1998; that was the main problem, the loss of the kind of control every nationl State is supposed to have over the basic instruments that govern all fields of production, from the primary ones to the most value-adding ones, not to mention the millions of users and consumers who need fuel. Well, YPF’s net profits between 1999 and 2011 of 16.5 billion dollars, and the dividends paid were 13.2  billion pesos.

That’s exactly the crux of the matter, the distribution of dividends and the lack of investments, and the reason that we need to import so much, and we will this year again, because we must keep our growth rate with the participation and effort of millions of Argentineans. (Applause)

It’s very small and hard to see, but I will tell you what this is: it’s Repsol YPF’s investments and returns. When they took over in ’98 or ’99, they paid 13.2 billion dollars. The total dividends, as I said, were 16.0 billion dollars. The Argentinean group which owns 25.46% of YPF’s shares earned 3.5 billion dollars over the sale, and their revenues after sales on the Stock Exchange –17.09% – amounted to 2.4 billion dollars, which places the investment balance between income and expenditure at 8.8 billion dollars.

On my way to Colombia some days ago, since it’s such a long trip, I read every Argentinean newspaper and still had time to read El País, where I saw an item dated April 13 with a suggestive title: Repsol’s Argentinean springboard, YPF, cost 13.0 billion euros and took the Spanish oil firm to the top).

That’s how the oil business made Argentina pay a third of the company’s gross profits. But what really hurt was a paragraph where I read that to Repsol – which decided to buy YPF in 1999, under Alfonso Cortina, to stop being a barely productive small local company and go up to the first division of the oil league – our government’s change of mind about the Argentinean subsidiary was more than just a mishap.

I want to tell everyone, Argentineans or otherwise, that this President is not going to answer any threat, is not going to respond to any sharp remark, is not going to echo any disrespectful or insolent thing some said, first because I represent the Argentinean people, and second, because I am a Head of State, not a hoodlum.

So those who expect this President to take heed of any insult, affront or slight are wasting their time. That’s neither what I’ve been voted for nor my responsibility, which is to lead this Republic seriously and formally, and in this regard YPF has a very important role to play.

This is not an unprecedented situation. We are the only Latin American country that doesn’t manage its own oil. what we have chosen is not a model of statism, mark my words, but one to recover our sovereignty and our control over an essential instrument, because we still work as an incorporated company in line with the law for private companies. We will manage this enterprise in a fully professional manner.

I also think that some self-criticism is in order, for we in Argentina have a long history of managing the various areas of the economy in the state’s hands with such a partisan or political style that in the end we played into the hands of those who said the state was useless and its assets had better be managed by private companies. This administration has proved that the state can manage its assets capably. (Applause)

Let us see how other countries are doing, starting with the world’s top oil producer:

  • Saudi Arabia, where the state –or rather, the monarchy – has full control over its production.
  • Russia’s Gazprom and Rosneft, 50% and 75.16%, respectively.
  • Iran’s National Iranian Co., full control too; Sinopec, 75.84%.
  • China’s CNPC, 66.41%.
  • Venezuela’s PDVSA, 100%.
  • Mexico’s Pemex, 100% . I remember when President Calderón tried to make a reform but privatization was not allowed, and now Mexico is still in control of 100% of its oil production.
  • United Arab Emirates, 100%;
  • Brazil’s Petrobras, 51%. We have chosen Brazil as our main trading partner, with which we want to deal on equal terms so that together we can help South America become a self-sufficient region. You probably heard me mention something I’ve been saying for years: the need to include Venezuela in MERCOSUR in order to close the energy ring.
  • Iraq, 100%.
  • Kuwait, 100%.
  • Norway, the Scandinavian nation that stands as a paradigm of hydrocarbon exploitation, the monarchy is in control of 63% and applies a virtuous model of investments on a pension fund that provides retirement benefits for 20 years. Norway’s model is one to be reckoned with when it comes to the management and use of resources.
  • Algeria’s Sonatrach, 100%.
  • Libya, 100%.
  • Kazakhstan, 100%.
  • Qatar, 100%.
  • Indonesia, 100%.
  • India, 74%.
  • Colombia, 90%.
  • Oman, 60%.
  • Malaysia, 100% – their model is among the best in the world.
  • Egypt and Syria, 100%.
  • Italy, 30%.
  • Japan 29%;
  • Uzbekistan, Chile and Bolivia, 100%.
  • Austria, 32%.
  • Uruguay and Nigeria, 100%. (Applause)

These are not invented figures. In a recent conversation with top executives of foreign oil corporations, they told me that the world’s leading companies no longer had oil services and are looking instead at new business models. Why?

Because they have realized that more and more states are increasingly reluctant to let go of an ever-strategic resource now turned vital and leave it in private hands. Hence our decision, also spurred by the need to align the interests of the National State with those of its provinces, because neither can survive without the other. (Applause)

According to the reform in 1994 –you know, the one we fought so hard for– oilfield ownership was transferred precisely to the provinces. But it is also true that this reform led somehow to the breakup of a state’s bargaining power over heavily investing, very powerful companies. And take it from me, because I’ve been married to a governor for 12 years and I know what dealing with emergencies and needs on a daily basis is really like. The governors often make hard decisions not because they don’t care about their provinces but because many times they are beset by very important needs they must meet, like education, health care, and other projects that detract from the sort of bargaining power they would do better with in different circumstances.

I’m sure that this move to take a 51% stake in YPF, together with the agreement to form unions, will preserve the interests of the nation. Perhaps many of you don’t know what stake unionization means: it’s a pact by which stakeholders always have to vote the same way. So if this bill becomes law, the Argentinean Republic and its provinces will have to act and vote as one to manage their parent companies and their subsidiaries (Applause), if only because their interest is one and the same.

I also want this to be state policy, not a single government’s one. It’s my call, but I’m not eternal, just a temporary instrument, and others will come when I’m gone. Therefore, we need to protect all this that took so much effort, as reflected by these hard figures, and brought so much loss, annoyance, bitterness, arguments, pressures and extortion, like last year when fuel went scarce in the middle of the election campaign. I’m not stupid; that I keep something to myself is one thing, but causing a fuel shortage… Look, paying more for gasoline is better than having none, which makes everyone nervous. How much maneuvering we saw, how much people standing in line, as a result of a situation that even the media helped develop, saying that I was angry then too. I’ll share with you an anecdote about Obama that is really worth listening to, but remind me that there should be a clause stating that a transfer like this needs the go-ahead from two thirds of Congress.

Some might think I’m overdoing it, that’s it’s the same majority you need to reform the Constitution. Now tell me what changes life more, a Constitutional reform or stagnation caused by a lack of gas, oil and fuel? (Applause) In ’94 we changed the Constitution, and truth be told, the reform was neither good nor bad, but rather neutral, because they invariably do something to draw our attention away from what really matters.

I’m not saying –please!– that the Constitution doesn’t count, lest tomorrow’s headlines go, "She said the Constitution is unimportant and worthless". No, please, the Constitution is no less than a covenant for coexistence and fulfillment we have all embraced. That’s why I hope that if anyone intends one day when I’m gone to sell again the State’s assets they will have to sweat a little to get the majority vote. (Applause)

I also want to say that we will not be fool enough to believe that an oil company expected to produce goods and services that call for high investments and sound marketing and distribution strategies can be managed with kid gloves. That’s why we have firmly laid down the legal principles about professionalization, for which we will call on all those Argentineans who left and now hold important positions in other companies, because many of them are very clever and experienced and therefore often chased after by foreign enterprises. We will call on them and those who stayed here in the hope of recovering a company that once was Argentina’s pride.

I can assure you that I will do my best and commit myself to use their professional skills and those of the ones who work in our provinces and the national state to put YPF back in its rightful, well-deserved place. All this about professionalization is not a menial thing, we want skilled people who must also be committed to a nationwide project, and that has nothing to do with political parties or factions –please!– but with a sustainable country and its development and growth; it has to do with our own history.

You may be wondering what’s in this box I’m holding on to. Well, I’ll go back to that, but first let me tell you the Obama story, which is also interesting. As you know, on Saturday we met for half an hour with the U.S. President, Dr. Barack Obama, at his request. It was really an excellent meeting in which we talked about many things, including our differences, although our main purpose was to reaffirm – after a prior exchange of letters and other meetings– that the relations between our two countries were above any difference. What’s more, the day before the U.S. Ambassador and our State Secretary had met to sign an agreement for the Fulbright Grants, consisting of 30 million dollars for science, technology and education, which both President Obama and I highly value.

In the very pleasant meeting we had, I told him, "Look, Mr. President, you will be in the papers tomorrow", in reference to nearby CNN and Fox reporters. "We also have them back home," I said, and made a sign to him to remind him of the photographer, "and they will publish that you challenged me, or demanded of or asked something from me, which is absurd, because usually no one calls a meeting to quarrel with the other party, but to sort things out. The logic of a meeting is to bring people closer to rather than further apart from each other."

Such was my understanding and the atmosphere that prevailed throughout the meeting, and once it was over, we said goodbye to each other in a friendly way, and then the summit ended for the day. Of course, I had my secretary print the headlines of La Nación and Clarín, where it said that I had asked for barriers to trade, which was absurd. We are the ones facing barriers as a result of our trade surplus with the U.S., and because of that we can’t buy meat, lemons, oranges or lamb!

Anyway, when all the presidents were sitting in a huge circle I approached Obama, showed him the front pages of both newspapers and, with Timerman as my translator, told him: "Mister President, look, this is what I told you yesterday". Timerman translated them for him, and he said, "Ah, unbelievable", and then, as Timerman told you, he told me I was free to say that it was absolutely false.

It was really a shame, for the media’s role should not be to sow discord or divide or bring governments into conflict but closer to each other, and especially to defend and stand for the interests of their people and put them before anything else. (Applause) Yet, it’s as common here as it is elsewhere, albeit here they do it with an almost incredible virulence and disregard for Argentina’s interests.

The worst thing of all is, and let this be clear to everyone, that I’m here only on a temporary basis, but you, your children, your grandchildren and their grandchildren are not. That’s what I wanted to make clear, and also thank President Obama for the excellent meeting we had in which we both defended what we had to defend, aware that a state has to go beyond trade relations, as I did regarding Aerolíneas Argentinas, a topic I had forgotten.

I’m asking you here and the Spaniards and the citizens of the world if anyone has ever heard this president complaining to the government of Spain about one of history’s most disgraceful asset-stripping moves, as they did to Aerolíneas Argentinas, forcing us to take charge of its employees and their salaries –we had been taking care of it even before the company was nationalized– its fuel, everything. Suffice it to read the papers from those days to see how they stood up for the Spanish owners, the same ones who are now on trial, not in Argentina but in Spain, for tax evasion, among other crimes. (Applause)

I’m asking you if this President has ever used harsh, inappropriate or uncalled-for language when addressing any foreign authority, although we must not lose sight of the fact that a company based in Argentina, make no mistake, is an Argentinean company, even if its stockholders are not! (Applause)

And we don’t mind if they make profits; let no one say that this is about reaping their benefits –just look at those of the telephone companies, some of whose stockholders are Spanish, which recently caused a blackout – so I hope that soon the Ministry and any other profit-making foreign bank or company will act accordingly. All in all, we don’t care about profits, but we do about the need that they reinvest here so as to keep producing and developing the country.

Be sure that we’ll continue working side by side with any Argentinean company with foreign stockholders while they contribute to our growth, as most have. We’ll keep working together, as we did with the motor industry when we helped General Motors and its U.S. stockholders, whom we gave loans so they could keep making cars (Applause) like we are doing with the Italian company FIAT, using the Bicentennial credit for its new Palio, and New Holland’s new investments in farm equipment, advertised here by Sergio Marchionne.

You may wonder, "How come they were so profitable? Very simple: they segmented the market, using the oil they drilled here and refined it to 80% to make premium gasoline, the most expensive people buy. Their profits came from JP1 and premium fuel, too expensive for planes. And we have to import gas oil and fuel oil to maintain agricultural, livestock and electric power production in Argentina. Market segmentation is the key. What they drilled they used to make only premium and took away the rest.

This is the story that hopefully ends with the passing of this law and the establishment of what we want: a national and profoundly federal company.

Now I’ll open the box, where I keep, wrapped in cotton, this little tube that I now hold with shaking hands. I’m afraid I might drop it, so I’ll put it here. This tube contains Argentina’s first oil, taken from well No. 2, found on December 13, 1907 in Comodoro Rivadavia. The Bernal family gave it to me as a gift last year in a special little box made back then. I don’t know if Federico Bernal’s grandson is here. Mr. Bernal often publishes articles and has written books on this subject. His maternal grandfather was our Director-General of Mines, Geology and Hydrology, under whose aegis this oil was prospected for and found. He came with his father and mother – engineer Emmerich’s daughter – who kept this for what it was: a family treasure, which I deem a historic and very significant treasure to us Argentineans.

It used to be in a pink, perfect box as old as this one that I gave it to one of my assistants so he could keep it for me, but it got lost eventually, until one day that only this little tube turned up. We’re still looking for the little box, but nobody remembers where it is. No one says, "I have not seen it," or "I never touched it." I guess one of them forgot where she put it and that’s why she doesn’t tell me. But we found this tube in my library 15 or 20 days ago, beside a blue and white stone I have, so I decided to show the Argentineans what we were capable of doing such a long time ago.

Later on, Hipólito Yrigoyen – another great Argentinean President – founded YPF (Applause) which has played a very important role in Argentina since. Let me tell you that bringing all Argentineans together, regardless of where they are, is a policy of our state. Let it be clear that YPF has no owner; it belongs to all of us. And I call upon its workers, all those who are in the oil well today, its pump attendants and all men and women in management, to help keep Argentina going and growing, each from their place of work, and rebuild this great company for all the Argentineans, in such a way that we can trust one another and avoid any groundless prejudice.

As soon as we take over YPF management, we should not hesitate to go into partnerships, be they joint ventures, temporary enterprise units or any modern-day form of business association, with other state and non-state companies and organizations. Yet, keep in mind that our 51% will not be managed by any local or national economic group but by our national state, which will see to it through management professionalization that there will be sufficient resources and the process will be profitable. (Applause)

For that reason we have also decreed a public interest of only 51% of the shares owned by Repsol, which actually has almost 57% of them. Our 51% is enough to seize control without detriment to either those who bought stocks in good faith and thus play the market or any other partner, since we all know that, unfortunately, this policy could not be reverted and things went as bad as we explained that fateful day in 2011.

I say fateful from the viewpoint of energy, because maybe, as many people thought, there will be another president here instead of me. I can’t get it out of my head, and I admit I may be wrong, but the truth is that I was surprised by such an incredible leap to 100% from one year to another, and in 2011 no less, a year when we saw as much growth as in 2010.

My call is addressed to all Argentineans, including the leaders of all political parties, albeit –I repeat– is not for any party or faction, but for everyone here. We didn’t create YPF, but those who did were under a government of our party, and you’re not with Peronism one day and against it the day after. I have always been a Peronist who takes care of business, for my sake and other people’s. (Applause)

In short, I am hereby calling upon all Argentineans to join us and telling you that today I decree, out of necessity and urgency, the takeover of this company and appointing the Minister of Federal Planning as its administrator, together with another official whom I met here yesterday at 7:30 p.m., the reason that I left earlier from Cartagena de Indias.

It’s a beautiful city, a symbol of all-time colonialism, like the Spanish one that we suffered, and a rampart against British imperialism, after Sir Francis Drake – did you know? – plundered and razed the city to the ground in 1533 before they built the wall and were besieged. That’s why they call it Cartagena the Heroic. Yesterday I was saying, "To think that all of us who are sitting here now are presidents from countries once colonized by the British, the French, the Spaniards, the Portuguese…" Anyway, the city is a real symbol.

I had to be here yesterday at 7:30 to meet with the Minister of Planning and the deputy minister of Economy, Mr. Kicillof, who will also take part in the economic and financial aspects of the nationalization, (Applause) since there’s the oil side and also the trade and financial operations. It’s precisely when you look at the numbers that you see that there was little of the former and so much of the latter; hence the need to keep an eye on both, as it’s done everywhere.

I’m also talking to the Argentinean businessmen – not the workers, who have always stood by us and are no doubt the ones who benefit the most from this model and will be represented in the state company – in whom we have put all our trust and worked very hard with. A few days ago I said that it’s not about substituting grass for oil, but usually, when you decide to support the businessmen and bring together the national employers like it’s done all over the world, it’s necessary to make them understand the need that they undertake to the country’s interests.

A while ago I talked with the Secretary about the prices of grass, and I hope he will take care of that this week, because I was told that a bale of grass costs 30 or 40 pesos and I can’t accept such a ridiculous price… [Talking to someone nearby] Yes, everything, when you’re up here you have to see to oil and grass, and also the companies and the producers. (Applause)

We would love to give the producers the raise they want – I know the governors are often beset by pay raises – but we must be people of judgment and aware that it’s very difficult to give a raise in these circumstances, even if it’s for a key producer, lest the pay raise ends up placing us on the verge of economic ruin.

It’s true, as I said days ago, that part of that money would go to the middle ground, but I think we must all learn this lesson: there’s no magic in economics or in the pricing system. What we do want to stress to every businessman in Argentina is that they have never been as profitable as from 2003 to date, and smart people don’t expect to make more or less profits only on the basis of the prices. They must understand that the solution lies in a greater turnover, a greater offer, and a stronger, unrestricted defense of national production. (Applause)

All this has brought us incredible criticism in some media. Everywhere the media defend the interests of the local businessmen, while Argentina is the only country where some media second the interests of the foreign businessmen. (Applause)

Worst of all is that reading the papers suffices to realize that, if we applied the policies those businessmen demand, they would be the first to take it out on us for protecting precisely the goods that they advertise in those papers. (Applause) It’s incredible to see that happening in Argentina!

I’d like to tell all businessmen that we won’t go for that, because I will keep on protecting our national industry as well as our users and consumers, who are one and the same. They were able to develop a domestic market because they had consumers who had jobs and better salaries. They must understand that the domestic market has to be looked after as never before, especially in times of all-out trade wars like those taking place in the world today or on the way to break out.

Nonetheless, I also told the Secretary of Trade that if they fail to bring the price of grass down to a reasonable figure we will allow grass to be imported so that people can brew mate. (Applause) And I’m telling you this because otherwise our nation will be at risk of going through failed experiences of the past, like when other rulers – say, Yrigoyen, Perón – protected our national industry but were not understood, and historic processes came to nothing as a result which, had they succeeded… It was even the case of Rosas, I’d say, if I go a little backwards.

The main problem was that raw materials were brought from our provinces untreated, or exported to other countries –like they did after Caseros– where they were before being sent back here. (Applause) That’s what happened, like the American Civil War but the other way around: the northern states won there, and the southern ones won here.

Well, I wanted to tell you all this just so you know that we’re dealing with everything at once. And as if that weren’t enough, there’s also Line 60, because we’re never short of problems here in Argentina. And I have to take care of it all because on top of that some of those who should simply don’t and in the end we all have to take over. (Applause)

Finally, let me tell you this: be it with oil, grass, or Line 60, we will keep working tirelessly for the Argentina he dreamed of. I only regret that he can’t… I think he’s somewhere watching us, but I hope he’s looking at me now like he always did, because he always, always, always wanted to recover YPF for the country. (Applause)


A CubaNews translation. Edited by Walter Lippmann.

(Video available, but without subtitles, here: <http://www.casarosada.gov.ar/discursos/25810-anuncio-del-proyecto-de-ley-de-expropiacion-de-ypf-discurso-de-la-presidenta-de-la-nacion>