A day after the Senate approved the proposed debt exchange as a way to circumvent U.S. court rulings Argentina government diskusses swapping global Argentine bonds for paper governed by local law. After a New York court had ruled that Argentina is prohibited from paying holders of its restructured bonds without also paying the hedge funds $1.3 billion plus interest.
In 2002 bondholders got less than 30 cents on the dollar as Argentina defaulted on about 100 bio $ in bonds, because a small group of hedge funds went to court for full repayment.
Argentina steadfastly refuses to pay the holdouts in full, saying that to do so would open the country to a raft of new lawsuits. Argentina fights against recession and inflation. With the swap Argentina tries to to circumvent the U. S. Court rufling and hold liquidity. „There is obviously willingness among many creditors, or bondholders, to participate in the sovereign debt payment law, in order to get the money that is owed to them,“ cabinet chief Jorge Capitanich told reporters. The debt swap bill, passed by the Senate on Thursday. It will allow holders of 29 bio $ in bonds under foreign law the choice to swap them for papers governed by Argentine or French law.
In need of financing to develop its vast Patagonian shale oil and gas fields, Argentina will be unable to issue fresh international debt until the lawsuits are settled.
With Patagonia shale oil and gas field Argentina is sitting atop of a shale bounty that could transform the outlook for the Western Hemisphere’s supply and secure the South American country’s energy self-sufficiency for decades. And it is in an area where you’ve already got oil industry activity. There are service companies, pipelines and infrastructure, and you have also knowledge of the rocks.
Asked what was the key reason behind the decision of US based Corporation Chevron to increase its investment in Vaca Muerta, Robertson answered: “We like the rock. That’s first and foremost. Drilling costs are coming down and the well results so far were sufficient to warrant additional investment.”
BP, CNOOC, Chevron and Sinopec will start 2017 to drill more than 1500 wells to produce 50,000 barrel/day of crude oil and 3 billion cubicfeet/day of natural, so YPF.
The Chevron Corporation is operating in Argentina for many years where it produces currently 21,000 barrels of crude oil and 4 million cubic feet of natural gas per day and has signed Heads of Agreement to spent $1.24 billion capital expenditure to explore and develop the shale oil and gas in the Vaca Muerta Basin within the Neuquen Province in Argentina.
This agreement comes at a critical period for Argentina as it should start to import natural gas and refined products although it is recognized to hold ones of the largest reserves in the world for shale oil and gas.
Chevron estimates that 2014 capital and exploratory expenditures will be $39.8 billion, including $4.8 billion of spending by affiliates.
At the same time NML Capital served subpoenas this week to Bank of China (BOC) and Industrial and Commercial Bank of China (ICBC) in an effort to obtain information on $6.8 billion in financing for deals signed by the two countries in July.
„We want to understand the mechanics of these credit facilities to establish whether assets to which Argentina has a legal title could surface in jurisdictions where we would be able to attach them,“ a lawyer advising Elliott told.
The subpoenas are aimed at a facility provided by China Development Bank, ICBC and BOC to finance the onstruction of two hydroelectric dams in Argentina’s southern Patagonia region and a loan from China Development Bank and ICBC to finance the Belgrano Cargas railway project.
Both deals were signed by Argentine President Cristina Fernandez and her Chinese counterpart, Xi Jinping, during an official visit of a Chinese delegation to Buenos Aires.