BUENOS AIRES: Argentine Deputy Economy Minister Axel Kicillof, who masterminded the nationalization of leading oil company YPF, will oversee an energy investment plan that tightens control over private companies, the government said on Friday.
Oil companies operating in the South American country will have to present an annual investment plan, and they could face fines or other sanctions, such as the withdrawal of concessions, if they fail to comply, a decree in the Official Gazette showed.
Leftist economist Kicillof will head a commission that will oversee a national investment plan for the industry, where production of oil and natural gas has failed to keep pace with years of brisk economic growth.
“(The commission) will evaluate the investment plans of each company ... to ensure they are consistent with the aims of the (government’s) national energy investment plan,” the decree said. “If it is deemed appropriate, (the commission) can ask for a new one to be presented.”
It said quarterly audits would be carried out to evaluate companies’ progress on their annual investment plans, warning that the commission “had the power to apply sanctions.”
Just before YPF’s nationalization, a string of Argentine provinces stripped the company of operating licenses on the grounds of slack investment to boost production.
Friday’s decree gives the central government the same powers and also allows the use of fines for companies failing to comply with the state’s energy sector investment plan.
Leading energy companies in Argentina include Brazil’s Petrobras, Argentina’s Pan American Energy — controlled by Britain’s BP Plc — Exxon Mobil Corp and Royal Dutch Shell Plc.
The center-leaning government of Argentina, which sits on some of the world’s biggest reserves of shale oil and gas, has steadily increased state control over the economy.
Besides nationalizing YPF, Fernandez seized control of the nation’s flagship airline and billions of dollars in private pension funds soon after taking office in 2008.