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05-24-22  carib

.. that granted, it is now a good time for intelligent energy and food producers not hit by war or sanctions.

05-24-22  carib

I fully agree Argy is an hit and run investment location.

05-24-22  savo

carib... peronism is not a political party anymore... it is a mentality... a virus... that that has been spreading all over the world over the last 80 years...

And there is no vaccine...

Peronism is the idea that a group of Illuminati up there can have the economy firing on 12 cylinders permanently irrespective of whatever hits the economy... and in the process solve the problems of the poorer classes and make them happy...

QE is peronism... TBTF is peronism... the bail out of GM is peronism... the NHS is peronism... lender of last resort is peronism... soft landing is peronism... Lagarde, Macri, Greece are peronism... negative real interest rates are peronism... soft landing is peronism...

the list is long... and getting longer... the survival of the political class depends on peronism... the president might change... but the political structure below him remains intact... it just switches chairs...

05-24-22  savo

bond... yo have to remember the way argie works...

argie works in pesos... argie costs are in pesos... whoever explores and produces in vaca muerta... pays pesos and receives pesos... because the produce will be sold in pesos locally at artificially low prices set up by the government... argie water electricity and gas tariffs are the lowest in the world...and are in pesos... oil at the pump in argie... is one of the cheapest in the world.

All those pesos received by the people who were awarded contracts to explore and produce in vaca muerta are enough to make those guys very rich in pesos... pesos that they can use locally to build mansions and buy yachts and expensive cars and jewelry ..and exchange them into dollars at the black market rate and buy expensive flats in Punta del Este or Miami..

If they end up exporting.... the dollars will go to the Central Bank and they will also get pesos.... if they have dollar bonds... they will have to buy dollars from the Central bank to pay them.. so vaca muerta can be a huge business success but bonds can still need to be restructured... as it happened last year... because the central banks did not have dollars to sell to them.

The BOT deficit in argie... something around 12bn pa... has to finance debt repayment public and private.. royalties.. services... and flight capital... a number several times larger.

So yes argie is an in and out opportunity... but it is not a long term investment opportunity.

05-24-22  bond

....and in current environment all those that had to pull out of Russia should be ready for a new venture in Argy.
The show must go on and prices of energy are way too high to ignore and sleep/missing out on opportunities. The world is full of capitalists. They did not become rich with doing nothing. Oil companies need to reinvest. Especially with all pockets full of cash.

05-24-22  bond

Bond, Vaca Muerta is alive ;-)
Panas, yes, lots of milk will flood markets ;-)
They only have to get the right partner to pay for exploration.

05-24-22  carib

Until the peronists are completely routed, I see little future for Argentina.

05-24-22  savo

the same will happen with vaca muerta... they will produce ... they will consume it locally at prices controlled by the government in pesos... an inner circle will get rich... nothing of relevance will happen.

05-24-22  savo

guys.... vaca muerta..... remember some years ago Petrobras was discovering one vaca muerta per month offshore...and I was laughing about it... scroll back... it is there somewhere...

well... years have passed... and petrobras continues producing the usual 2mmbarrels per day... and pbr stock is worth the same as always...

05-24-22  spal

Panas - tech probably has 20-20% more to go - but prices getting more realistic now.

05-24-22  panasonic

Bond, Vaca Muerta is alive ;-)

05-24-22  panasonic

Tech destroyed, taking off my bid on AMZN, placed 10MM sqft of warehouse for rent, crazy days.

NVDA reports tomorrow, if misses buckle up.

05-24-22  bond

The large oil discovery in the Vaca Muerta Formation was made in 2010 by the former Repsol-YPF, which announced the discovery in May 2011.The total proven reserves are around 927 million barrels (147.4×106 m3), and YPF's production alone is nearly 45,000 barrels per day (7,200 m3/d).In February 2012, Repsol YPF SA raised its estimate of oil reserves to 22.5 billion barrels (3.58×109 m3).The US EIA estimates total recoverable hydrocarbons from this Vaca Muerta Formation to be 16.2 billion barrels (2.58×109 m3) of oil and 308 trillion cubic feet (8.7×1012 m3) of natural gas, more than even the Neuquén Basin's hydrocarbon-rich Middle Jurassic

05-24-22  spal

Alliance Resource Partners, L.P. - Common Units Representing Limited Partnership





Climbing against a bear market and other headwinds ... they will hike distributions again soon IMHO

05-24-22  bond

And Vaca Muerta in Argy, a gigantic oil/gas field
.........and a friendly government, which just made a road trip worldwide to promote the project.

05-24-22  bond

Carib: but the political cost of constant blackmail is higher.

Office of Foreign Assets Control / sanctions are the perfect blackmail tool, a favorite of the Trump administration and all US Presidents. Constant blackmail is part of politics since a long time and nothing new. New may be that US are not the only ones using it.

05-24-22  bond

And Vaca Muerta in Argy.... instead of giving 55 billion to Ukraine and still having an energy crunch divert 1 billion to Vaca Muerta to get the gas out of the ground and one problem less in the world ;-)

05-24-22  bond

Aramco CEO warns of global oil crunch due to lack of investment

I also have RIG bonds (Transocean), bring it on!

05-24-22  bond

Social Media Stocks Sink to Erase $180 Billion on Snap Warning

Bonds, guys, BONDS.....

05-24-22  carib

HOUSTON/WASHINGTON, May 24 (Reuters) - The U.S. Treasury Department is getting ready to renew in the coming days Chevron Corp's (CVX.N) license to operate in Venezuela, but likely without the greatly expanded terms the U.S. oil major sought, four people close to the talks said.

The last U.S. energy producer in Venezuela asked President Joe Biden's government in March for a license that would allow it a greater say in its joint ventures with Venezuela's state-run PDVSA, a first step to reviving output and controlling where oil is sent.

In a reversal of earlier hopes for a broadly expanded authorization, however, the license now is expected to be renewed as-is or returned to some of the terms it had in 2020, which did not limit Chevron's drilling, processing or shipping oil from Venezuela, according to the people. A final decision has not yet been made, one person familiar with the matter said.

05-24-22  carib

SPAL: Aramco boss is correct, IMHO.
Coal should be phased out before oil.

05-24-22  spal

Cycle time matters! 5 years for Saudi to add 1MM Bbl/d of new capacity. "If we could do it before 2027 we would have done it. This is what we tell policymakers. It takes time." An energy crisis years in the making is equally years in the solving...

Eric Nuttall

05-24-22  spal

Aramco CEO warns of global oil crunch due to lack of investment

DAVOS, May 23 (Reuters) - The world is facing a major oil supply crunch as most companies are afraid to invest in the sector as they face green energy pressures, the head of Saudi Aramco told Reuters, adding it cannot expand production capacity any faster than promised.

05-24-22  spal

ARLP ... added ...

05-24-22  carib

IMHO, unless putinism falls soon by disease or military crash, europe will mostly wean herself off russian energy for the long haul.
this is economically pretty stupid for both sides, but the political cost of constant blackmail is higher.
It's like a supertanker: changing course takes time, but once the tanker turns, it is for a long stretch.

05-24-22  spal

PT - agree on the 3 points - I'd say the embargo is an element that points out how long these conditions will persist and will cause the continuance of redirection of energy supplies. The price is not merely spot, but the forward strip price. Higher for longer is meaningful for me. I am not merely a putista.

05-24-22  patient-trader

1. an EU oil embargo against Russia mostly influences the shipping costs as Russian oils have to be shipped to Asia.
2. Urals are trading at a big discount, as traders avoid it
3. An EU embargo has factually already happened as the big traders are not buying Russian oil anymore.
So whether the EU does an embargo is largely irrelevant and already priced in.

05-24-22  spal

Germany Wants Russia Oil Embargo, With Or Without Hungary
By Irina Slav - May 23, 2022, 10:00 AM CDT
Germany is one of the most vocal supporters of a Russian oil embargo.

Germany's Economy Minister Habeck:

We support cutting Hungary out of oil embargo on Russia.

05-24-22  spal

May 23, 2022
4:19 PM CDT
Last Updated 6 hours ago

German economy minister expects EU embargo on Russian oil 'within days' -ZDF

05-24-22  spal

Elevated hurricane risks are likely to impact both Henry Hub natural gas and WTIC oil markets.

05-24-22  spal

Gas will keep going higher through the summer, says Paul Sankey

MON, MAY 23 20222:53 PM EDT

05-24-22  spal

5th largest refinery in the US is offline… 540,000 barrels per day

Quote Tweet
· 6h
Exxon’s Baton Rouge Refinery Loses Steam Power, Most Units Shut. Steam won’t be restored until at least June 1

05-23-22  carib

05-23-22  spal

Feels like start of portfolio rebalancing (market index and passive funds) from tech to energy.

05-23-22  carib

collective colores lesson..

05-23-22  leopardo

Me too..100% agreed Cac

05-23-22  CAC

The most expensive lesson I took in many years

"and one should not play against OFAC on sanctions"

05-23-22  carib

SPAL: a recession in the summer is very possible, but if russian supply is weaned, Iran remains under sanctions, and Venezuela cannot ramp up massively (it cannot) I think the GAS market should remain stressed, at least in europe.

05-23-22  spal

Energy trades doing well - main issue is what happens to demand (depth and synchronization of recessive economic forces) and if the EU drags its feet on Russian sanctions. Otherwise supply side remains inadequate.

05-23-22  carib

PPS: I own no russian bonds (and did not in the last decade).
But I would not mind buying @16 and selling @100 (in the US$).
However, one does not play against the FED on rates, and one should not play against OFAC on sanctions, IMHO.

05-23-22  carib

PS: we hold different opinions on most political issues, including the war in Ukraine, sanctions, abortion, democracy, etc.
No problem. Let us concentrate on objective issues, such as in which currencies and assets should our estates be concentrating..


05-23-22  carib

Savo: not really.
The "conversation" was about viable currency alternatives to Dollars and Euros, from our (colores) point of view.
I obviously dislike inflation, but dislike non-convertibility even more.

05-23-22  carib

SJT and MTR (us gas rusts) doing pretty fine..

05-23-22  patient-trader

re-entered my Brent put.

05-23-22  savo

carib.. the conversation was about Russia being able to impose payment in rubles for its exports...

the answer is yes and that is what is happening right now and why the ruble is strong... something similar could be done by China who is already setting up swap lines with many countries in the world to by pass the dollar... in the end if a sufficiently large number of big countries export and import outside the dollar.. the US will have three options:

1. raise taxes
2. lower public spending
3. continue financing the deficit with freshly printed dollars that nobody wants... hence more inflation...pauperizing the lower and middle classes à la argie.

When it comes to the bonds... Putin owes dollars and has to pay dollars... but as you know from the veni case... that is less a Putin problem an more a creditor problem...

I find absolutely pathetic that the US steals reserves and assets from other countries as a war weapon... shows.. anyway... how corrupt and incompetent the US elites are ...

05-23-22  carib

PS: my family life is between europe, the US and LatAm.
in that wide region, with dollars and euros I can move assets and spend money relatively easily.
If I tried the same with Rubles and RMB.. it would not be possible.
I have no intention of moving my centre of interests to Moscow or Shanghai, and I see a constant flow of wealthy persons from russia and china setting a base in the west.
I guess there are reasons explaining the above..

05-23-22  carib

Savo: if I buy RF bonds in US$.. the russian government tells me he will pay in Rubles rather than dollars.
How do I get those rubles Back to hard currency?
A russian lady wants to buy my house, but she has RE in Moscow that she can sell only for Rubles.
How does she get Euros for those Rubles?
Money is valuable for me if I can freely move it around, exchange for other currencies and buy stuff in the jurisdictions of choice.
inflation is a problem, but the lack of free convertibility and capital movement is a much bigger problem..

05-23-22  savo

carib...If I get paid in Rubles in Russia

thing is you are not getting paid in rubles in Russia.... you "are" paying rubles to Russia...

If you were a Russian exporter... you were being paid rubles in Russia anyway.. the dollars you received abroad... you had the obligation to bring them to Russia to the Central Bank and receive rubles.

05-23-22  savo

Lagarde Says ECB Likely to Exit Negative Rates by End of September


05-23-22  spal

Russia and China’s gold could form the foundation of a new monetary system outside of the control of the US.


Who gives a shit if they do ... good luck to them.


Such moves would be the final nail in the coffin of dollar dominance.


Nope ... no nails and no coffin.

05-23-22  spal

it is what you described as "normal".


At this stage of post industrial, post global, post and pre (the new) pax Americana ... there is no such thing as normal ...

05-23-22  amigo-latino

_Geopolitics Takes A Back Seat As Biden Drops Sanctions On Venezuela
May 22, 2022, 4:00 PM CDT
Rumors that the U.S. would lift sanctions against Venezuela in order to halt the oil price rally have been circulating since Biden sent a delegation to Caracas in March.
The U.S. has now officially begun easing sanctions on Venezuela, a move that is driven by a desire to reduce gasoline prices rather than any geopolitical motive.
Venezuela has expressed its desire that all sanctions be lifted and continues to work closely with Iran to rebuild its oil industry - despite Iran also being under sanctions.
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When Biden sent a delegation to Caracas in early March, rumors began to circulate that the U.S. was considering reopening relations with Venezuela as oil prices soared. Now, after a period of silence from Washington on the subject, it appears that the U.S. is going to ease its sanctions on the Latin American oil giant. At the same time that the U.S. is lifting some sanctions, Venezuela is working with Iran to help revive its oil industry. It seems geopolitics has taken a back seat to the global energy crisis as oil prices soar. The U.S. imposed oil sanctions on Venezuela under the Trump administration in 2019 due to ongoing human rights violations by President Nicolás Maduro. Under President Biden, there were discussions about reopening some trade links by allowing crude-for-diesel exchanges on humanitarian grounds, although this never came to fruition. However, the U.S. oil and gas firm Chevron has been allowed to continue limited operations in Venezuela in order to help avoid the collapse of the country’s oil industry. There has been speculation in recent months around whether Biden would ease restrictions on Venezuela in response to global crude shortages and a severe rise in oil prices, with several commentators highlighting the dangers of such a move.

The White House announced in May that it was reconsidering its restrictions on Venezuelan oil, entering discussions with Maduro. Biden will now allow Chevron Corp. to negotiate its oil license with state-owned oil producer Petroleos de Venezuela (PDVSA), thereby reducing certain sanctions on the oil-rich state. Although no further oil drilling or additional revenues for the Maduro government will be permitted. The move follows a meeting between US officials and Maduro in March to discuss how to move forward.

Venezuelan Vice President Delcy Rodríguez confirmed rumors about the shift in policy by tweeting “Venezuela aspires that these decisions of the United States of America pave the way for the absolute lifting of the illegal sanctions that affect all of our people.”

But the Republican opposition has been quick to criticize Biden’s actions. Senator John Barrasso, the top Republican on the Senate Energy and Natural Resources Committee, strongly opposes the easing of sanctions on Venezuela, stating "our experience buying Russian energy should have taught President [Joe] Biden that buying energy from tyrants is a dangerous proposition."

The White House apparently responded to a request by Maduro’s political opposition to ease sanctions, although the opposition said that the request came from Maduro. The Biden Administration hopes that dangling oil industry allowances in front of the president may encourage him to make greater political concessions with the opposition, putting Venezuela on track for free and fair presidential elections in 2024.

Despite ongoing sanctions, Venezuela has been trading oil products with U.S.-sanctioned Iran in recent months, using discreet shipping methods. Venezuela has also increased its oil exports to China. Iran has been using ship-to-ship transfers to deliver oil products to Venezuela, as well as other clandestine methods. Although Venezuela has around 303 billion barrels of proven oil reserves, its crude is extra-heavy and requires condensate to dilute it, which has been in short supply.

Iran has also shipped gasoline and equipment to Venezuela to support the reparation of PDVSA's rundown refineries. This month, the state-owned National Iranian Oil Engineering and Construction Company signed a $116 million contract to restore the EL Palito 146,000-bpd refinery to restart production. This builds on the agreement between the two countries, established in 2021, to swap Iranian condensate for Venezuelan heavy crude.

In April, more than 200,000 barrels of Iranian heavy crude were shipped to Venezuela’s 310,000-bpd Cardon refinery. In addition, 400,000 barrels of Iranian oil reached the Dino I carrier, en route to the Jose port. A further 2 million barrels of condensate were expected to reach Jose the same month. Despite the ongoing sanctions, Iran and Venezuela are becoming increasingly successful at boosting their energy trades.

The new agreement follows a meeting earlier in the month between Iran’s oil minister and President Maduro in Caracus. The two sides discussed “the construction of routes and mechanisms to overcome the unilateral coercive measures imposed by the United States government and allied countries” in the meeting, according to the PDVSA. The two countries have been working together to overcome the sanctions imposed on both states by the U.S., as they each look for a way to redevelop their hard-hit oil industries.

Iran has boosted its oil production and exports over the last year as several countries have become more willing to open their doors to Iranian energy as a nuclear deal looks more promising. As a result of President Trump’s reimposition of sanctions on Iran after the U.S. withdrawal from the JCPOA, the country’s crude exports fell dramatically. But as talks for a new nuclear deal recommenced under president Biden last year, Iran’s oil production increased, rising to an average of 2.4 million bpd in 2021 and around 3.8 million bpd this year.

As the U.S. slightly eases its sanctions on Venezuela, it suggests greater potential for the country’s oil industry. Having boosted output and exports in recent months, it will likely build upon its existing relationship with U.S.-sanctioned Iran to help develop more trade routes and get ready to boost supply if greater allowances come into place.

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