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12-07-19  carib

Does YPF have enough direct dollar revenue to service its dollar debt and pay for any required imports without problems in the coming year without requiring any help from the state?

12-07-19  savo

bond.. be careful with the argie press ...most of those articles are paid...Nielsen has been campaigning to get the YPF job once the Ministry was not going to be.. making promises that he will not be able to fulfill...and buying journalists to write in his favor.

A lot of things have to change in argie ..structuraly... to be able to attract the kind of money that is needed for this development.. do not forget that only 7 years ago.. these same guys nationalized YPF to give to their friends.

Also.. who needs more oil or gas these days... do you see a deficit of gas or oil worldwide?

To put it into perspective... Bolivia has gas reserves of 11tr cubic feet... that is equivalent to 1850 million barrels of oil...Vaca muerta has 750.

So i am not sure if there will be a taker for Vaca Muerta´s oil production abroad.. may be at home... but it will not generate dollars.

There is a lot of politics going on with Vaca Muerta... but I do not think it is going to be in the short term.. a fraction of what they are promising.

Having said that YPF bonds will follow the general mood of the market..New government new expectations....

12-07-19  carib

The White House has rejected suggestions of a power-sharing arrangement between Maduro and Guaido or mediation led by third countries.

A second administration official said that the only solution to the Venezuela crisis is Maduro peacefully leaving power.

It’s not clear how the U.S. could bring more pressure to bear on Venezuela directly, especially without hurting Maduro’s opposition.

12-07-19  bond

https://www.cronista.com/economiapolitica/Nielsen-va-a-YPF-para-blindar-Vaca-Muerta-y-traer-us-30.000-millones-20191206-0079.html

12-07-19  bond

Nielssen was the favorite for some time to become President of YPF. No upset and the stock was up 3,5% in NY and 2.85% in Argy on Friday.

https://www.lapoliticaonline.com/nota/122168-macri-ends-his-term-leaving-state-oil-company-ypf-in-the-red/

Positives IMHO from above story:

The proposal will target all the players in the market and, to increase the enthusiasm, Guillermo Nielsen has a whole team working on the development of a new bill to provide tax incentives and guarantee legal certainty to the eventual investors.

This is a fundamental step to ensure a double flow of foreign money to alleviate the worrying lack of dollars in the Argentine economy: the first income through investments that will later reach the goal of exporting an additional 40 billion dollars in hydrocarbons, as envisioned by Matías Kulfas.

On the other hand, they insist that it is necessary to stop distracting resources in other areas that the government was forced to get into. "Not only was YPF abandoned by the Macri administration, but it was divorced from its fundamental role. It was diversified into renewables and electricity when its participation in the producing provinces shrank sharply. It has to return to its role as a witness, protagonist company. To turn massively to conventional hydrocarbons and shale," Bernal added.

12-07-19  patient-trader

Pana and AOC must be delighted
https://www.wsj.com/articles/amazon-leases-new-manhattan-office-space-less-than-a-year-after-hq2-pullout-11575671243

12-07-19  savo

no problem saying one thing and the contrary at the same time...trump´s solution to veni....? more pressure on cuba!!!!

Trump Weighs More-Muscular Venezuela Moves on Doubts Over Guaido
By Jennifer Jacobs

https://www.bloomberg.com/news/articles/2019-12-06/trump-revisits-venezuela-strategy-as-confidence-in-guaido-wanes


"No military option is under consideration, but White House officials have discussed new approaches including an attempt to partner with Russia, a Maduro ally, to ease out the Venezuelan leader, or raising pressure on Cuba, Maduro’s main sponsor."


12-07-19  savo

carib.. as with everything Trump the whole thing is a mess...India that had stopped purchasing veni oil restarted its purchases.. Rosneft markets veni oil without restriction... Chevron continues operating in Veni and organises golf tournaments...

Al while Mnuchin and his minions chase cargo ships transporting oil to Cuba...

Pdvsa is now a shell... but as long as it is the entity madated to develop oil exploration.. production...etc... nothing has changed.


12-06-19  carib

Savo: "PDVsa privatised".. hope PDVsa bondholders will not be left with an empty shell..

12-06-19  savo

Ironies of Trump
...

tomorow is the Chevron Golf Cup in Veni Maracaibo... sponsord by... Chevron!

https://www.bloomberg.com/news/articles/2019-12-05/there-s-still-time-for-golf-amid-venezuela-oil-industry-collapse

12-06-19  savo

pdvsa has essentially been privatized .. only the JVs are producing oil...one of which is Chevron... of course.


Rosneft Subsidiary Leads Talks on Some Venezuela Service Deals
By Fabiola Zerpa
December 5, 2019, 7:19 PM GMT-3 Updated on December 6, 2019, 8:00 AM GMT-3

https://www.bloomberg.com/news/articles/2019-12-05/rosneft-subsidiary-leads-talks-on-some-venezuela-service-deals

12-06-19  carib

Nielsen, new president of YPF.. is the same guy who in 2005 famously said "los holdouts?
que se jodan".
eventually, holdouts got 150%.

12-06-19  carib

With Fernandez as president, the burden cleary is on investors and the IMF to provide solvency relief to what has become the Mercosul trading bloc’s biggest basket case.

The proposal for a two-year moratorium on all debt service — something Argentina has proposed many times before — is also not feasible. Asking Argentina’s funders to “extend and pretend” forfeiting any near term payments is okay without any reassurance on future debt payments has got to be a non-starter, says Siobhan Morden, head of fixed income Latin America at Amherst Pierpont Securities in New York.

“The assumptions of the Fernandez team may quickly shift from re-profiling (the debt) to restructuring once there is careful assessment of the economic situation,” Morden says. “We don’t underestimate the difficulty of designing a realistic economic program under the ideological constraints of a Kirchnerista public consumption growth model that will face pushback from bondholders and the IMF.”

12-06-19  spal

CELP - knocking on $10 again ... bit of a range trader and I bought more as it corrected, but heading into $10 with conviction. I think the range ratched-up higher ...

12-06-19  pillz

US Hourly Earnings up 3.1% in the past year, outpacing core inflation (YoY) for the 84th consecutive month.

//

12-06-19  bond

I love it. USD stronger vs EUR.
1.1061 -0.0043 (-0.3863%)
As of 3:24PM GMT.

12-06-19  spal

December 6, 2019 at 8:44 AM EST
The United States added 266,000 jobs in November as the jobless rate decreased to 3.5 percent, reflecting a surge of strength in the labor market that has muscled through recession fears that flared over the summer.

The data, released by the Bureau of Labor Statistics, beat expectations ...

... well of course it did.

12-06-19  patient-trader

from my mailbox
"Through our key Corporate product, Serbian Branch we have managed to open accounts for client form jurisdictions that are treated with high risk like Venezuela, Marshal Island etc."
https://welcometoserbia.org/en/services/branch-office/

12-06-19  bond

YPF "The company is not even considering an extension of maturity" that we like :-)

Given weak demand and the current fuel price freeze, YPF has been managing capex and is currently working on its 2020 plan. The company has been delaying investments in some projects and now expects full year capex to be slightly below the US$3.5 billion plan. Production targets will remain in place for 2019, but management is now discussing 2020 capex, which could be reduced relative to 2019. Importantly, 60% of capex is in pesos and thus depreciation inherently reduces the amount of dollar investments. Uncertainty and the price freeze are considerations for lower capex in 2020 but the impact of the freeze has improved with the exclusion of wholesale and the 5% increase at the pump. After our meetings, the Macri administration announced further increases in fuel and crude prices.

In the medium term, the company is looking at different investments projects since Vaca Muerta should be a key focus for the incoming administration. Management does not expect the price freeze to linger for a prolonged period of time because it is not sustainable and impacts royalties to the provinces. As such, liberalizing pricing and maintaining import parity should set the right conditions for evaluating medium-term investments. We see hurdles to full fuel price liberalization, particularly in an environment of severe macro instability. YPF believes Argentina will regain its status as a hydrocarbon exporter with the development of Vaca Muerta and believes there is room for investments on the gas and liquids front. On the gas front, YPF says Argentina has room to increase exports to Chile (currently 3mcm, but capacity is 15mcm). Additionally, the company is assessing the possibility of a sizable LNG facility, developed via a JV, which could offer gas in the spot market and have competitive costs worldwide. For the time being, YPF is working on underground storage facilities to inject gas. On the oil front, the company is developing a heavy oil field in Mendoza that is ISS2020 compliant. YPF seldom exports any cargoes, but this could change as production ramps up and the company already has an export facility on the Atlantic. There is also an idle pipeline to the Pacific that has not been used for the past 8 years.

Despite market fears of further government intervention, YPF is confident it has certain safeguards to maintain an appropriate balance sheet. Management explained the government chooses the chairman of the board and 2 representatives for A-shares. However, the board is composed of 12 people and they don’t believe the government can force decisions. With this in mind, YPF continues to manage net leverage prudently, with 2x as a ceiling and a higher cash balance than the needed US$500-700 million in their view. They have been paying down debt (CHF300 million bond paid in September) while other short-term debt balances are predominately with banks, which have mostly been rolling the short-dated lines. With regards to the 2021s, YPF is currently looking at options including multilateral loans and secured bonds. Given the current debt mix skews to ~80% in global bonds, management feels it would be good to diversify, especially if capital markets remain expensive. The company is not even considering an extension of maturity as it finds itself in a more privileged situation compared to other Argentine corporates with recurring access to financing locally and internationally.

On other investor concerns, YPF did not have additional information on ongoing legal matters and voiced comfort with YPF Luz, although they could reduce exposure. The judge is waiting to see the precedent for the Burford trial in the US, and the trial should not begin until year end. YPF is very confident with regards to the outcome because it is the intervened asset and not the perpetrator. If the trial is not resolved in the company’s favor, YPF would continue to appeal or ask the government to pay the fine. Separately, on the environmental trial, all sides are gathering evidence and YPF communicated that it is not responsible for the contamination that happened in the 60s or 70s since the company in question was acquired in the 90s. The acquired business is now bankrupt and YPF has not extracted any cash from it over the years. Finally, on YPF Luz, while management views the business as a strategic and important asset due to the development of renewables, they acknowledge that the company could be in a tough spot with contract renegotiation. If YPF Luz runs into any trouble, YPF would not inject capital and the company mentioned that it could divest 25% if the opportunity arises.

12-06-19  Alex

https://www.bloomberg.com/news/photo-essays/2019-09-11/one-country-eight-defaults-the-argentine-debacles


good luck
u will need it

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