Economist Aldo Ferrer, the future director of the new company, told IPS that Enarsa ”is emerging with all of the authority required to influence every link in the energy chain. If it does a good job and its projects are top-quality, it will be an important company.”

According to article four of the new law, Enarsa will have the capacity ”to intervene in the market in order to prevent situations of abuse arising from the monopoly or oligopoly position” of companies.

”A state-run company is always a factor leading to a realignment of the market,” said Ferrer.

The idea to create the new company was announced last May as part of the centre-left government's plan for investments aimed at dealing with the energy crisis, whose effects have been felt since April, when restrictions of natural gas supplies and electricity went into effect.

In the 1990s, the government of Carlos Menem (1989-1999) privatised most of Argentina's public enterprises, including utilities like water, power, gas and telecommunications, as well as the oil company, Yacimientos Petrolíferos Fiscales (YPF).

YPF was South America's third largest state-run oil company, after Petróleos de Venezuela (PDVSA) and Brazil's Petrobras. But 11 years ago, YPF was put up for tender and acquired by the Spanish oil group Repsol.

After nearly four years of recession and outright collapse, the Argentine economy, Latin America's third largest, began to recover in early 2003.

As a result, demand for natural gas, which is used to generate electricity for industry and residential areas alike in Argentina, began to rise. A year later, the first shortages began to be felt.

Kirchner accused the privatised natural gas companies of investing only in pipelines to carry the fuel to the more profitable markets abroad, rather than insuring supplies to the local market and expanding the areas covered by the local grid, as the National Law on Hydrocarbons stipulates.

The drop in supplies slowed down the recovery of economic activity and triggered a row with neighbouring Chile, the main buyer of Argentina's natural gas, when the Kirchner administration restricted exports despite the resistance put up by the gas companies.

It was against that backdrop that the government decided to create Enarsa, which will explore, exploit, produce, generate, transport, distribute and market petroleum, natural gas, electricity, coal, nuclear energy and alternative sources. It will also sell energy on the domestic and international markets.

In addition, the company will hold the permits to explore and exploit all offshore concessions that have not yet been awarded.

”All countries have at least one of the two main elements that insure control over their energy resources,” said Ferrer. ”The first is the regulatory framework for the sector, and the second is the company itself. Argentina will now once again have both.”

The bill to set up Enarsa drew criticism and sparked heated debate. Lawmakers in favour of free-market policies argued that the creation of a state-owned company represents a setback with respect to the 1990s, when public enterprises were privatised under the argument that they were loss-making and inefficient.

Meanwhile, centre-left legislators applauded the founding of Enarsa, although a few voiced misgivings. Parliamentary Deputy Claudio Lozano, who belongs to the Central de Trabajadores Argentinos (CTA) trade union federation, expressed concern over the projected future growth of the private sector's share in the company.

If the proportion of shares held by the state shrinks, as occurred in the case of other mixed ventures which followed that route to privatisation, the private capital participating in Enarsa would gain access to offshore drilling ventures, which are currently off-limits to private companies.

For that reason, among the proposed modifications of the original version of the bill, Lozano suggested the incorporation of the obligation that the state retain a controlling share of the company, and a slightly weakened version of that clause was approved.

The creation of Enarsa was also backed by members of MORENO, the ”movement for the recovery of Argentina's energy sovereignty”, which wants energy companies to be put back in state hands, on the grounds that hydrocarbons are a strategic resource. However, the group did criticise a few aspects of the new law.

Gustavo Callejas, a member of MORENO, commented to IPS that the new company should be completely state-owned.

In addition, he said, it should receive not only the areas that have not yet been granted in concession, but those that have already been tendered out and whose concessionaires have failed to live up to the terms of their contracts -- which describes a majority of the concessions, in his view.

Callejas noted that the hydrocarbons industry in Argentina is dominated by just a few companies, which control 90 percent of the production of gas and oil. Moreover, many of them have an influence over every stage of the process -- from pumping to selling fuel domestically and abroad.

Those companies are Spain's Repsol, the biggest exporter of Argentina's gas and oil reserves, Petrobras from neighbouring Brazil, Pan American Energy (which includes British Petroleum-Amoco and the Argentine company Bridas), France's Total, and another Argentine firm, Techint.

”As long as those companies control the business, a barrel of oil, which costs 4.50 dollars to produce, will sell for 30, 40 or 50 dollars on the internal market, in line with international prices,” complained Callejas.