Argentina no longer faces a $16.1 billion court-ordered payment tied to the 2012 nationalization of state-owned oil company YPF.
A U.S. appeals court overturned the 2023 judgment that had awarded damages to minority shareholders, Barrons said on Friday. The United States Court of Appeals for the Second Circuit ruled 2–1 that the claims were not recognizable under Argentine law. That removes a potential liability estimated at up to $18 billion, including interest.
The case stems from Argentina’s 2012 seizure of a 51% stake in oil company YPF from Repsol under then-president Cristina Fernández de Kirchner. Repsol settled for $5 billion in 2014. Other shareholders, including Petersen Energia and Eton Park, did not receive compensation. They filed suit in 2015, arguing that Argentina failed to make a required tender offer under YPF’s bylaws.
The U.S. district court agreed in 2023 and set damages at $16.1 billion. Argentina appealed. The appellate court reversed, finding that Argentine law did not support the breach of contract claims. The case was heard in New York because YPF is listed on the NYSE, but the legal standard ultimately rested on Argentine statutes.
For Argentina, the removal of a $16–18 billion liability directly affects reserves, debt servicing capacity, and fiscal planning. Argentina had argued the payment would consume a large share of its foreign currency reserves.
“We won the YPF trial,” Argentine President Javier Milei said on X.
For Milei, this means Argentina does not have to come up with $16–18 billion in hard currency. That removes a direct draw on reserves and avoids pulling capital out of oil and gas. YPF continues funding drilling, completions, and midstream buildout in Vaca Muerta without the spectre of diverting cash to a legal payout.
The ruling also sets clear limits for US investors. YPF may trade on the New York exchange, but Argentine law controlled the outcome. That limits how far foreign shareholders can pursue claims in U.S. courts and will feed directly into how investors price legal and political risk in state-controlled energy assets going forward.
By Julianne Geiger for Oilprice.com
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