Enrique Mosconi - YPF and The Nationalization of Oil

YPF and The Nationalization of Oil

On 16 October 1922 Mosconi was appointed Director-General of the Fiscal Petroleum Reserves (Yacimientos Petrolíferos Fiscales, YPF), where he would stay for eight years, devoting large efforts to increase exploration and development of petroleum extraction.

YPF received an initial grant of 8 million Argentine pesos by the national government, and from then on became self-sufficient, financing itself with the profits of extraction and, of course, without foreign investment or loans. In 1925 Mosconi considered the possibility of a state-private society, but in 1928 he turned back on his proposal and further stated:

"There is no other way but the monopoly of the State in a wholesale fashion, that is, in all activities of this industry: production, elaboration, transport and trade... Without an oil monopoly it is difficult... it is impossible for a State company to defeat private capital organizations."

He also remarked that, in order to defend Argentine fiscal oil reserves from the foreign companies, there was the need of "a magnificent insensitivity to all demands on the part of private interests, either in accord or not with the collective interests, but even more, what is needed is a political power capable of containing all opposing forces". Some of the nationalistic policies of Venezuelan President Hugo Chávez have been marked as a continuation of this doctrine.

He created in 1927 the Alianza Continental (Continental Alliance) advocating economical independence for Latin American states, an association gathering mainly students and intellectuals, and focusing in particular on oil policies. Between 1927 and 1928 Mosconi toured Latin America telling and teaching the authorities about the Argentine experience with regards to fossil fuels, campaigning for an integration of efforts in the matter of petroleum as a resource. Mosconi was the major proponent of a national policy that put natural resources at the service of economic, industrial and social development of the nation. He defended nationalization of these resources, an absolute fiscal monopoly on surveyance and exploitation, the need for Latin American countries to agree on common actions in this matter, and the passing of resource-related legislation that was advantageous to the interests of the national states. During this trip, Mosconi met with Lázaro Cárdenas, who would nationalize oil in Mexico ten years later, and General Elías Plutarco. The influence of these doctrines reached Mexico, Brazil, Uruguay, Bolivia and Colombia.

Mosconi managed YPF efficiently and, while establishing a soon-to-be major oil company, starts fighting the political pressure of two giants of hydrocarbon exploitation: the British-Dutch Royal Dutch, and John D. Rockefellers' Standard Oil.

In 1929 Mosconi received Edmundo Castillo, Uruguay's Minister of Industry, and counseled him about the establishment of a national refinery and a state corporation to sell its products. This led to the creation of ANCAP (Administración Nacional de Combustibles, Alcohol y Portland), the state energy corporation created by the Uruguayan government in 1931.

In 1936, after the Chaco War, the state of Bolivia created Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) after the model of the Argentine company, and soon afterward it dictated the expropriation of the Bolivian Standard Oil Company.

In 1938 the same ideas led to the Conselho Nacional do Petróleo (CNP). That year Mosconi was awarded a medal by the Academy of Science and Art of Rio de Janeiro, in recognition for his work.