Ypf could take on debt in the market in 2023 to finance investments: source

Argentine state oil company YPF could go on the market in 2023 to place debt to finance part of its investments, two years after its bond restructuring, a company source said on Friday.

The company, which this year made investments of about 4,100 million dollars, plans to invest more than 5,000 million dollars in 2023, a figure that will be defined on December 15, when the board of directors defines the budget for next year, explained the source in the YPF building in Buenos Aires.

“Next year we would need to take on a little bit of debt,” said the executive who asked not to be named.

“I don’t know what box we are going to have, we have to calculate inflation, fuel prices. Faced with the investment we plan to make, the balance that remains is what we must take into debt,” he explained.

The issuance would be the first since the oil company, which in the third quarter nearly tripled its earnings compared to the same period in 2021, restructured some $2.1 billion of debt at the beginning of 2021.

YPF leads production and development activities at Vaca Muerta, a formation the size of Belgium located in the southern province of Neuquén, which is the world’s second largest unconventional gas reserve and fourth largest oil reserve.

With the aim of exporting part of this gas, in September the company signed a Joint Study and Development Agreement (JSDA) with the Malaysian company Petronas to advance in the construction of a new gas pipeline from Vaca Muerta and a liquefied natural gas (LNG) plant. ).

The source said he expects the project with Petronas to move forward once the National Congress approves a new LNG promotion law, which he expects to happen in December or January.

“The agreement is good. Once the law is in place, the confidentiality agreement ends and then the two parties will meet with the Vaca Muerta gas producers to move forward,” he explained.

The Minister of Economy, Sergio Massa, said that he will send the bill to Congress to discuss it in the sessions of the austral summer, an initiative that will seek to promote the million-dollar investments needed to build LNG plants.

The companies demand that Argentina, where the energy market operates under strong state intervention, guarantee by law that they will be able to comply with LNG export commitments, in addition to tax and exchange benefits.