Argentina oil crisis hits YPF  shares
The dispute has inflamed passions. Picture: AP

Shares in Argentine oil firm YPF have plunged 32 per cent in New York after trading in the group was suspended for a day and a half as Buenos Aires moves to seize control of the company.

At the close of trade, YPF, a subsidiary of the Spanish firm Repsol, was quoted at $US13.12 ($A12.66), a drop of 32.72 per cent from the time trading was suspended on Monday.

With the drop, YPF has lost nearly 70 per cent of its value from a peak on January 26.

In Buenos Aires, the share lost 28.6 per cent of its value.

Argentina's President Cristina Kirchner announced on Monday she was submitting legislation to nationalize YPF, infuriating Repsol and the Spanish Government, which had warned against the intervention.

Repsol executive chairman Antonio Brufau values the firm's 57.4-per cent stake in YPF at $US10.5 billion ($A10.13 billion) and he has vowed to recover it through international arbitration. Argentina has cast doubt on that valuation.

Repsol bought Yacimientos Petroliferos Fiscales in 1999 for $US15 billion ($A14.48 billion) in what was the biggest operation of the privatization program of former Argentine president Carlos Menem.

The unit remains the largest oil firm in the South American nation, where it leads in fuel sales and has 54 percent of the country's refining capacity.

But the Argentine Government had been increasingly critical of lower investment by YPF, which has meant a drop in production of oil and gas.

The West Australian

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