News Article | November 4, 2016
NEW YORK, November 4, 2016 /PRNewswire/ -- Stock-Callers.com has lined up these four major players in the Integrated Oil and Gas space for review: Royal Dutch Shell PLC (NYSE: RDS.B), Statoil ASA (NYSE: STO), TOTAL S.A. (NYSE: TOT), and YPF S.A. (NYSE: YPF). On Thursday, oil prices...
News Article | January 15, 2016
YPF SA and American Energy Partners LP have signed a joint venture agreement to explore and develop unconventional oil and natural gas from Argentina’s Vaca Muerta formation providing that financing can be arranged.
News Article | November 23, 2016
Diego Marynberg predicts that the next 2 years will see continued adjustment in the hedge fund sector and expects many to disappear as a result of the increased volatility Adar Capital Partners' Adar Macro hedge fund has accumulated a yield of 30% between January and October this year and 57% since it was launched in August 2013, consolidating it as one of the most profitable funds in the world. In the view of Diego Marynberg, President of Adar Capital Partners, "the current crisis of many hedge funds is essentially due to the fact that they took up positions years ago in a market that over-invested at very low interest rates in assets with too much leverage. If we add to that that there will be more and more volatility, the consequence is that many hedge funds will have to disappear in the short term because they will not be able to guarantee returns or justify management fees of over 20 percent." According to Marynberg, this severe adjustment among hedge funds will extend until 2018. "The decline in profitability of some hedge funds since the financial crisis has been most dramatic in developed markets, but not in other regions such as Latin America," says Marynberg. "In Latin America there are some excellent companies such as Petrobras, YPF and Ecopetrol with bonds denominated in US dollars and whose profitability exceeds 8% per annum. To achieve these yields in the US, Europe or Asia you would have to invest in so-called junk bonds. In contrast, in Latin America they are mostly companies in which the state is the principal shareholder, which means that furthermore they are backed by a quasi-sovereign guarantee. Another advantage in this region is its lower leverage, which means they are less affected by economic crises. This group of companies represents 40% of our investment portfolio and in the medium term they are less affected by the vagaries of the market." In 2017, Adar Capital Partners expects to expand its portfolio of investors and its Adar Macro fund to grow from its current $850 million to $1 billion.
News Article | October 26, 2016
The deep red craggy hills of Vaca Muerta, or Dead Cow, rise up against the horizon. This site produces more shale gas than any other place in the world, outside the United States. Fracking could provide Argentina with cheap energy for generations, but Mapuche indigenous communities who live here say it is polluting their land. What is fracking and why is it controversial? Last year, she says, 60 of her baby goats were born without hair. A week later they died. She thinks fracking has contaminated the groundwater. "The animals drank the water and then they gave birth to kids with just skin, no hair. That's never happened before." Her sister Josifa say the water has made her sick. "I've had stomach aches. I've also vomited. "We know it's because the water is contaminated, but we have to continue drinking this water. Albino Campo is the leader, or lonko, of this Mapuche community called Lof Campo Maripe. "The Mapuche people are angry. We feel like they have enslaved our land. It's as if someone came into your house without asking. "They have contaminated everything," says Mr Campo. His community is an extended family of 125 people living on farms dotted over 11,000 hectares of land, although they only have a legal title to a small part of it. They have lived here since their grandparents migrated from Chile in 1919. There are five other Mapuche communities in this region, together comprising about 1,000 people. Fracking involves injecting thousands of litres of water, chemicals and sand deep into the earth at high pressure to release gas. Fracking work began here in 2010 and since then, many foreign oil companies have bought concessions to drill gas wells. US oil company Chevron has invested $2.5bn (£1.9bn) in Vaca Muerta as part of a joint fracking project with Argentina's state-owned oil company YPF. So far, the YPF-Chevron partnership has drilled 420 wells and it plans to drill 200 more over the next two years. The two companies plan to invest a total of $16bn dollars in fracking here. Turkeys and chickens scurry around a farm belonging to Albino Campo's son. A well in the farmyard contains a long pipe to pump up the water. The pipe is covered with a greasy black substance and when the water is deposited in the bucket there is a greenish-brown residue in the bottom. "A year ago, this water was crystal clear," says Albino Campo. "This is how it comes out now." The BBC asked Chevron for a comment but they told us to speak to their operating partner, YPF. Juan Garoby, an executive manager of YPF, says there is no evidence that fracking has contaminated the water. He says that the gas in Vaca Muerta is taken from a depth of 3,000m and the water being drawn by locals is only 300m under the ground so the two are separated by a big expanse of rock and layers of earth. When a well is drilled, the hole is cased in steel and then surrounded with cement. Another two layers of iron casing and cement are then added in order to isolate it from the groundwater. "There is continuous monitoring of the water by the provincial environmental agency and it has found no signs of contamination," he says. According to Mr Garoby, there are no fracked wells near Mapuche animal farms. He also says that Vaca Muerta is a great opportunity for Argentina, a net importer of energy, to become self-sufficient. The US Energy Information Administration estimates that Argentina has the world's largest recoverable reserves of shale gas after China. Pro-government Congressman Eduardo Amadeo also thinks fracking is vital for Argentina's future. "Argentina needs oil and gas. You cannot stop production for 45 million people because one or two thousand people feel that their rights are affected," he says. But Martin Alvarez of the campaign group Observatorio Petrolero Sur says that fracking not only poses an environmental risk to Mapuche communities, but to the wider rural population of 54,000 people in the province and to residents of the provincial capital, Neuquen. The group is calling for a halt to fracking on indigenous territory, farming land, nature reserves, urban areas and sites near water sources such as rivers, lakes and lagoons. Juan Garoby says these restrictions are not necessary because fracking is safe. "If you take the precautions you need to take and if you are careful about isolating the surface water, there shouldn't be any problem about developing in any area. "It's just a matter of being conscious and having the right environmental policies in order to have the minimum impact on the environment."
News Article | September 20, 2016
“Anything below $100 per MWh will be a success for a government that is paying over $100/MWh for thermal generation,” Marcelo Alvarez told Recharge. Alvarez expects wind to come in between $70 to $80, while for solar PV he sees prices ranging from $80 to $100/MWh. By comparison, in the most recent Chilean and Mexican tenders wind came in around or below $50/MWh, while solar sank to around $30/MWh. Local press has reported the government as claiming that prices will come in at around $40 to $60 per MWh. Officials will set a ‘secret’ cap price for the tender, which concludes in mid-October. But according to Alvarez, Argentina is still paying the price for its recent history of defaults, which raises financing costs for projects and which, after almost a decade, has only started to be addressed at the beginning of 2016 with the swearing in of market-friendly president Mauricio Macri, who has taken steps to renegotiate country’s sovereign debt with creditors. Despite abundant resources, Argentina has been the ugly duckling of wind and solar in the region, with only around 2% of its 33.8GW capacity from non-hydro renewables. In the last tender in 2009, in which 1GW was contracted, only about 14% was built due to difficult financing conditions, says Alvarez. Argentina – which has 279MW of wind installed and less than 10MW of solar – is racing to make up for lost time, especially now that it has revised its renewables law, which set a 20% target for 2025 with an interim 8% by the end of 2017. “Argentina is the third market in the region after Brazil and Mexico … if it complies with the law the projection is for 5GW in five years,” said Alvarez. To meet the target, the government has promised to hold one or two renewable tenders a year and the global sector has set its sights on the country, which is opening up another market after Chile, Brazil, Mexico and Peru – all which have held regular auctions in the past few years. With 20-year dollar-denominated PPAs, a $500m guarantee from the World Bank, funding from the newly-created renewables trust fund FODER, tax incentives and exemptions for imported equipment, the government has registered 6.37GW of bids for the 1GW of contracts – which will include 600MW of wind, 300MW of solar and 100MW of other renewables such as biomass and small-hydro. Alvarez said that government could even contract 30% more than the 1GW, which he expects could be mostly solar. “Depending on the quality of companies and the solidness of bids, the government could increase the amount contracted.” Alvarez is betting on a faster growth of solar because it is easier to license and build, while Argentina’s northwestern Andean provinces, such as Noa and Cuyo, have solar resources similar to those of Chile. By comparison, the tender rules for wind projects require at least two years of on-site measurements. According to the government, 58 solar projects – with a total capacity of 2.8GW – were registered for the tender while for wind, 49 projects were registered with a total 3.5GW. The tender has attracted big international bidders such as Italy’s Enel, China’s JinkoSolar and Envision, the US’s Invenergy and Soenergy, as well as Spain’s Isolux and Acciona. Germany’s Siemens has recently said it plans to build 600MW of renewables in the country. Among local players, Alvarez said that the strongest are Genneia and 360 Energy – which already invest in renewables – but also oil companies that are looking at clean energy, such as Pampa Energia and state oil company YPF. Smaller local and international players are also expected to be present. “Several Spanish companies and small international companies will partner with local companies to build the projects, in order to tap international financing and because Argentine companies don’t have much experience in terms of installed megawatts,” Alvarez said. These smaller players have been able to bid because the government has relaxed some of the qualification rules such as reducing the required net worth needed to bid, and allowed companies to used preliminary licensing and grid-connection authorisation. The next battle will be between local and imported equipment producers to supply installation demand that is projected by the government to reach 10GW by 2025. Argentina has always been one of the most industrialised countries in Latin America and was the home to the only regional wind turbine maker, Impsa. As the Argentine machine-maker emerges from its own default, it is reportedly offering a new locally-assembled turbine model designed for the fledgling domestic market. But Cader’s boss says the government will need to seek a compromise between imported and locally-made equipment. “The tender has allowed import taxes to be exempted through the end of 2017,” Alvarez said. “To grow at the speed required by the [renewables law] we will need everything: Argentine equipment, equipment from the Mercorsur trade-block, and the rest of world because we don’t have capacity to supply everything locally.” Brazil-based wind turbine makers – which are located within Mercorsur – are looking at the Argentine market to boost their sales. Cader is seeking a middle-ground position, and has been lobbying for the government to implement a policy to guarantee space for some components in which the local industry can be competitive. The results of the tender will determine if Argentina will be able to meet its target but the learning curve will be steep, believes Alvarez. Next year, at least one more tender will be held. The government says it will be launched in the at the end of the first quarter, but Alvarez believes it will be in the second half to give enough time for players to ready projects already contracted and prepare for another bid. “Argentina has never had such short time-frames … but the officials at the ministry are efficient,” he said. “If the first tender is a success, then the time-frame could be shorter.”
News Article | February 24, 2017
Royal Dutch Shell PLC and Argentina’s YPF SA have signed preliminary terms and conditions of an agreement to develop a shale gas pilot project in the Vaca Muerta shale of Neuquen province.
News Article | March 4, 2016
BUENOS AIRES, Argentina (AP) — Argentina's state-run YPF energy company is following an order by the country's Supreme Court to disclose to the court clauses of an investment deal with U.S.-based Chevron Corp. in one of the world's largest shale deposits. YPF delivered a copy of the contract to a Buenos Aires court on Tuesday. It's uncertain whether all clauses of its deal with Chevron to produce oil and gas by hydraulic fracturing in southern Neuquen province will become public. YPF said in a statement it's concerned about releasing confidential information that could affect the deal and place the company in a disadvantageous position with its competitors and shareholders. The Supreme Court ordered YPF to release the information in November after the company refused to disclose environmental and other information to a local lawmaker.
News Article | February 16, 2017
Despite its estimated 802 trillion cubic feet (Tcf) of unproved, technically recoverable shale gas resources, Argentina’s dry natural gas production declined each year from 2006 to 2014, and the country has shifted from a net exporter of natural gas to a net importer. In 2015, natural gas production increased for the first time since 2006, as ongoing efforts to increase production from key shale gas areas in Argentina aimed to reduce its imports of natural gas. Once one of the largest natural gas exporters in South America, Argentina was a net importer of natural gas by 2008. Imports, which accounted for 23% of Argentina’s natural gas consumption in 2015, came by pipeline from countries such as Bolivia and, to a lesser extent, as liquefied natural gas (LNG) from sources such as Trinidad and Tobago. The Argentinian government hopes to stop importing LNG by 2022. Argentina is the third country in the world, after the United States and Canada, to commercially develop tight oil and shale gas. Argentina’s Vaca Muerta formation within the Neuquen Basin has an estimated 308 Tcf of technically recoverable shale gas resources. Vaca Muerta’s geologic properties have been compared to the Eagle Ford play near the Gulf of Mexico in Texas in terms of its depth, thickness, pressure, and mineral composition. More than 588 vertical and horizontal shale wells have been drilled and completed in the Vaca Muerta shale play since 2010. According to the Argentine Ministry of Energy and Mines, shale gas production reached 64.6 billion cubic feet (Bcf) at the end of 2015. Argentina’s national oil company, Yacimientos Petroleiferos Fiscales (YPF), the most active operator in the Vaca Muerta shale play, has initiated joint venture pilot project agreements with partners such as Chevron, Dow Chemical, and Petronas to further develop the play. Although Vaca Muerta may have similar geologic properties to the Eagle Ford play in the United States, the production history of the Eagle Ford may be difficult to replicate in Argentina. From 2010 to 2013, more than 10,000 wells were drilled in the Eagle Ford, and average inital production per well nearly tripled over that period. However, since 2014, the decline in world oil prices has resulted in lower upstream capital expenditures as operators prioritize their spending. While drilling costs in Argentina have declined, they are still higher than YPF’s target costs. The average drilling and completion cost of a horizontal well in Vaca Muerta was estimated to be $11.2 million as of 2015, compared to $6.5 million to $7.8 million in the Eagle Ford. Ultimately, the economic competitiveness of Argentina’s indigenous shale gas resources will depend on the costs of domestic drilling and completion and the productivity of newly drilled wells. Although Argentina has an established energy industry, the current oil and gas sector is relatively small. The highest active rig count in Argentina in recent years was 110 for its nonshale oil and gas production, compared to more than 230 dedicated shale rigs in the Eagle Ford alone in 2013. Argentina has relatively high labor and imported equipment costs, shortages of specialized shale rigs, and limited proppant capacity—factors likely to hinder efforts to quickly increase production.
News Article | September 21, 2016
BUENOS AIRES, Argentina (AP) — Argentina's state-run YPF energy company says it will disclose clauses of an investment deal with U.S.-based Chevron Corp. to produce oil and gas by hydraulic fracturing in one of the world's largest shale deposits.
News Article | September 26, 2016
“In the future, we see clear opportunities of co-investment with local and foreign companies in the sectors of thermal generation, renewables, power transmission and distribution, cargo rail transport and health, among others,” said Alejandro Bottan, GE’s CEO for the southern cone. A spokesperson for GE said that the company is in talks with partners to participate in the bidding for 1GW of renewable projects – of which 600MW will be wind – that the country expects to conclude in October. The spokesperson said that GE had made preliminary agreements for the tender, but any contracts would depend on the results. Interest in the tender has been high, with bidders offering a total of 6GW in projects, mostly solar and wind. GE this week announced that it would invest and co-invest up to $10bn in Argentina through to 2026 , of which the first $1.2bn has been lined for the construction of a thermal power project in partnership with state oil company YPF, and financing for national air carrier Aerolineas Argentinas. GE follows Siemens in announcing multi-billion investment tickets in Argentina as president Mauricio Macri takes steps to implement more market-friendly policies and renegotiate the country’s defaulted sovereign debt, after being sworn in at the end of 2015. The country is implementing a revised renewables law which targets 20% by 2025 through yearly tenders and other measures. The announcements of GE’s interest in Argentina were made this week by John Rice, vice president of GE Global, during an event in New York in the presence of Macri and part of his cabinet, which followed talks last week between GE top officials and Macri in Buenos Aires during an investment forum. “This is a great moment for Argentina in which we see great opportunities in economic and social development. We are proud to be here bringing capital, technology and collaborating with local companies and the government to make this transformation a reality,” said Rice.