BUENOS AIRES, Argentina (AP) — Argentina's president granted vast new power over the nation's economy Friday to a young firebrand who was the brains behind the takeover of YPF from Spain's Repsol oil company.
Axel Kicillof is now responsible for managing investments by the state-owned pension agency in private firms — a position that could give him considerable influence with about 30 companies that drive the South American nation's economy.
President Cristina Fernandez also put Kicillof in charge of a commission responsible for implementing the country's new energy policy.
The commission has the power to set oil and gas prices, and companies will be obligated to open their books to auditors who can apply sanctions if they don't meet the government's investment goals.
Both moves were made by presidential decree and announced through the official government bulletin.
"Executives under pressure from the government aren't going to say anything, but the message from this decree is not a good sign, not only because of the image of Kicillof, which they don't find friendly, but also because it suggests more regulation and continuing down a path of a political price to pay — that it's the oil companies who are responsible for a lack of investments," said Daniel Bosque, director of the Enernews trade magazine.
As Argentina's secretary for economic policy, Kicillof, 41, advocated paying nothing in advance to Repsol for expropriating YPF, which had been Argentina's state-owned energy company for decades before it was privatized in the 1990s.
Repsol demanded $10.5 billion for its stake in the company, but Kicillof made it clear that any payment would be much lower and take years to complete.
Now he's tasked with establishing the criteria for setting "commercially reasonable prices for the internal market," and publishing a price scale for all the elements that go into producing oil and gas so that a "reasonable profit margin is obtained."
Fernandez also put Kicillof in charge of making sure Argentina's leading private corporations support the government's goals.
ANSES, the government-run pension agency, inherited shares held by private pension funds when they were nationalized in 2008, and has increased its stake in dozens of companies since then. Now Kicillof is tasked with using the government's role as a shareholder to influence corporate decisions.
yahoo.com
Axel Kicillof is now responsible for managing investments by the state-owned pension agency in private firms — a position that could give him considerable influence with about 30 companies that drive the South American nation's economy.
President Cristina Fernandez also put Kicillof in charge of a commission responsible for implementing the country's new energy policy.
The commission has the power to set oil and gas prices, and companies will be obligated to open their books to auditors who can apply sanctions if they don't meet the government's investment goals.
Both moves were made by presidential decree and announced through the official government bulletin.
"Executives under pressure from the government aren't going to say anything, but the message from this decree is not a good sign, not only because of the image of Kicillof, which they don't find friendly, but also because it suggests more regulation and continuing down a path of a political price to pay — that it's the oil companies who are responsible for a lack of investments," said Daniel Bosque, director of the Enernews trade magazine.
As Argentina's secretary for economic policy, Kicillof, 41, advocated paying nothing in advance to Repsol for expropriating YPF, which had been Argentina's state-owned energy company for decades before it was privatized in the 1990s.
Repsol demanded $10.5 billion for its stake in the company, but Kicillof made it clear that any payment would be much lower and take years to complete.
Now he's tasked with establishing the criteria for setting "commercially reasonable prices for the internal market," and publishing a price scale for all the elements that go into producing oil and gas so that a "reasonable profit margin is obtained."
Fernandez also put Kicillof in charge of making sure Argentina's leading private corporations support the government's goals.
ANSES, the government-run pension agency, inherited shares held by private pension funds when they were nationalized in 2008, and has increased its stake in dozens of companies since then. Now Kicillof is tasked with using the government's role as a shareholder to influence corporate decisions.
yahoo.com
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