\t\t\t \t\t\t\t\t \t\t\t\t\t President Javier Milei\u2019s victory in the October midterms served as a calming balm for many market sectors. Oil and gas appear as one of the main benefactors, as La Libertad Avanza\u2019s landslide win has prompted a boom in corporate bonds.\u00a0<\/p>\n
The sector\u2019s companies are bullish all around. Most are flocking to the markets looking for investors after experiencing a lull in the months leading up to the election due to high country risk (and therefore, prohibitive interest rates) and exchange rate pressure. Others are announcing new projects, like Vista Energy, which recently confirmed a US$4.5 billion investment in Vaca Muerta, a shale oil and gas region in the south of the country.<\/p>\n
Analysts agree that the fall in country risk after the vote (from over 1,000 to around 600 basis points) is the main driver of the boom. According to economist Lorenzo Sigaut Gaviria, from the Equilibra consulting firm, the midterms were a \u201cturning point\u201d considering the situation prior to the elections<\/p>\n
\u201cJuly, August, September, and October were very slow, with a lot of uncertainty, a lot of risk, a lot of exchange rate pressure, and the sale of reserves from the National Treasury, the Central Bank, and even the U.S. Treasury,\u201d he told the Herald.<\/p>\n
A report by the Epyca consulting firm said that, even though Argentina is still far from being able to finance itself at reasonable rates (which would currently involve taking on debt at over 10% in dollars), the drop in country risk \u201cis clearly a step in the right direction.\u201d The report added that developments helped oil and gas companies issue corporate bonds and get the financing they had been needing for months.\u00a0<\/p>\n
Only this week, Tecpetrol, YPF, and Pampa Energ\u00eda raised US$1.7 billion. TGS and Pluspetrol sought up to US$500 million each. Not accounting for Pampa Energ\u00eda (which is an energy company more than just oil and gas), that would make it US$1.25 billion since Milei won in October.<\/p>\n
According to Sigaut Gaviria, the oil and gas sector has the potential to place more than US$5 billion in corporate bonds from Monday after the elections until the end of the year.\u00a0The economist said that Milei\u2019s \u201cresounding victory\u201d means \u201cgovernability, the possibility of passing laws in Congress like the budget, and then reforms.\u201d\u00a0<\/p>\n
\u201cSo now everything has decompressed, and obviously this group of companies that hadn\u2019t done so are seizing the moment and coming out to place [debt]. And that\u2019s what we\u2019re seeing now \u2014 it also looks like nothing to everything in a minute,\u201d he added.<\/p>\n
Juan Jos\u00e9 Carbajales, an analyst from the Paspart\u00fa energy consultancy, added another reason for the optimism, pointing to the fact that the end of the Incentive Regime for Large Investment (RIGI) in mid-2026 can also be causing companies to speed up plans and a need for financing. One of them is YPF\u2019s liquified natural gas (LNG) plan, which entails building six floating LNG facilities, specialized ships that convert natural gas into LNG at sea.<\/p>\n
Also, national companies that bought assets from international companies that were leaving, such as Plus Petrol, will also require financing.<\/p>\n
\u201cThis seems to be just the beginning,\u201d he said.<\/p>\n
Vista Energy\u2019s announcement On Wednesday, oil and gas company Vista Energy announced a US$4.5 billion investment in Vaca Muerta. The goal is to boost its production by 60% and reach 180,000 barrels of oil equivalent in 2028. The company, which has already invested more than US$ 6 billion in Argentina, has established itself as the country\u2019s leading independent crude oil producer and largest oil exporter.<\/p>\n
The announcement was made by Vista Energy\u2019s CEO, Miguel Galuccio, during a meeting with investors. Galuccio, who was the CEO of state-owned oil and gas company YPF from 2012 to 2016, said that a change in taxes and regulations \u2014 part of Milei\u2019s agenda \u2014 are next on the to-do list if Argentina wants to compete with the United States.<\/p>\n
\u201cToday, wells in the United States cost about 35% less than in Vaca Muerta,\u201d he said. \u201cIf we really want to take the next step, we have to tackle that structural agenda,\u201d Galuccio added, saying that \u201cthe regulatory framework\u201d is beyond the company\u2019s control.<\/p>\n
He said that a potential elimination of export duties would be the \u201cicing on the cake.\u201d\u00a0<\/p>\n
\u201cIf the taxes that increase costs by 30% are lowered, that means more investment, more production, more foreign currency, and more jobs. For Argentina to go from 40 active rigs to 200, we have to address that,\u201d he added.<\/p>\n","protected":false},"excerpt":{"rendered":"
President Javier Milei\u2019s victory in the October midterms served as a calming balm for many market sectors. Oil and gas appear as one of the main benefactors, as La Libertad Avanza\u2019s landslide win has prompted a boom in corporate bonds.\u00a0 The sector\u2019s companies are bullish all around. Most are flocking to the markets looking for […]<\/p>\n","protected":false},"author":12,"featured_media":9719,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[42,673,3377,2511,3184],"tags":[96,1475,3374,3375,3376],"class_list":["post-9718","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economics","category-energy","category-oil-and-gas","category-vaca-muerta","category-vista-energy","tag-economics","tag-energy","tag-oil-and-gas","tag-vaca-muerta","tag-vista-energy"],"_links":{"self":[{"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/posts\/9718","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/comments?post=9718"}],"version-history":[{"count":0,"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/posts\/9718\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/media\/9719"}],"wp:attachment":[{"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/media?parent=9718"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/categories?post=9718"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/tags?post=9718"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}