Argentina Fights U.S. Court Order to Hand Over YPF Oil Company Shares

Argentina’s government has asked a U.S. judge to stop a ruling that would force the country to give up its majority shares in YPF, its biggest oil and gas company.

The judge in New York said Argentina must hand over 51% of YPF’s shares to foreign investors as part of a $16.1 billion penalty. This penalty comes from a legal fight that started after Argentina took control of YPF from a Spanish company in 2012.

Back then, Argentina’s government took over YPF without offering to buy out smaller shareholders, even though the company’s rules required it.

Two investment groups, Petersen Energía and Eton Park Capital, sued Argentina in the U.S., saying they lost money because the government did not follow the rules.

A firm called Burford Capital later bought the rights to these lawsuits, hoping to win a share of any money awarded. The U.S. judge, Loretta Preska, ordered Argentina to move its YPF shares to a U.S. bank within two weeks, so the investors could receive them.

Argentina Fights $16.1B YPF Ruling to Keep Energy Control

Argentina’s president, Javier Milei, says the country will appeal and argues that the court cannot force the government to give up these shares. He also says Argentine law protects the shares and that only the country’s congress can approve such a transfer.

The $16.1 billion penalty includes money for damages and interest. Burford Capital could get a large share of this amount if the ruling stands. The U.S. Department of Justice has supported Argentina’s position against being forced to hand over the shares.

YPF is very important for Argentina. The company leads oil and gas production, especially in the Vaca Muerta region, which has some of the world’s largest shale oil and gas reserves.

YPF produces over 400,000 barrels of oil and about 70 million cubic meters of gas each day. If Argentina loses control of YPF, it could hurt the country’s ability to manage its energy and attract investment, at a time when the economy is already struggling.

This case shows the risks countries face when they take over companies without following the rules that protect investors. The outcome will affect Argentina’s reputation in global markets and its chances of getting investment in the future.