A U.S. judge has temporarily delayed Argentina’s court-ordered transfer of its 51% controlling stake in state-run oil giant YPF, granting the cash-strapped country three extra days—until July 17—to pursue emergency relief from a $16.1 billion judgment.
The delay, ordered Monday by District Judge Loretta Preska, comes after Argentina asked the 2nd U.S. Circuit Court of Appeals to intervene. Judge Preska made clear the stay is short-term only, chastising Argentina for its continued attempts to sidestep the ruling. “The Republic has abused the court’s accommodations and thus will not be given additional ones,” she wrote.
The legal fight stems from Argentina’s 2012 expropriation of YPF shares from Spain’s Repsol without extending a mandatory tender offer to minority shareholders—Petersen Energia and Eton Park Capital. Backed by litigation funder Burford Capital, those shareholders sued in the U.S. and were awarded damages last year totaling $16.1 billion. Burford is expected to collect 70–75% of the payout.
Argentina has argued that its YPF shares are immune from seizure under the U.S. Foreign Sovereign Immunities Act and that relinquishing control of the country’s largest energy firm would destabilize its economy. In its emergency appeal, Argentina also warned that if it gives up YPF now and later wins the case, the loss would likely be irreversible.
President Javier Milei’s government is battling inflation, a debt crisis, and a critical shortage of foreign currency reserves. YPF, meanwhile, is central to Argentina’s energy ambitions. The company leads development of the massive Vaca Muerta shale basin, which produced 447,000 bpd in March—up 26% from a year ago—and underpins a $3 billion crude pipeline build and three LNG projects, including a 12 mtpa FLNG joint venture with Italy’s Eni.
YPF CEO Horacio Marín has projected profitability even if oil drops to $40 per barrel and is executing a “four-by-four” strategy to quadruple company value in four years. Losing government control of YPF could derail that roadmap and upend Argentina’s drive to monetize Vaca Muerta gas through LNG exports.
For now, the turnover is on hold. But if the appeals court declines to intervene by Wednesday, the order to hand over YPF’s controlling stake could proceed—delivering a financial and political blow just as Argentina tries to turn an economic corner.
By Julianne Geiger for Oilprice.com
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