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Argentine power projects to receive US$700mn in loans

Bnamericas Published: Thursday, September 12, 2019

The Overseas Private Investment Corporation (OPIC) has approved a series of loan deals in which it will provide nearly US$690mn for oil & gas and wind farm financing in Argentina.

Vista Oil and Gas, an independent Argentine explorer and producer focused mostly on the Vaca Muerta formation, has secured a US$300mn OPIC loan to invest in its Bajada del Palo block.

The package was provided by OPIC as part of a strategy to help boost economic growth in Argentina.

As part of the same package, OPIC also approved a US$150mn loan for Aleph Midstream, a nascent midstream company owned by Vista and founded by its creator, former YPF CEO Miguel Galuccio.

Vista recently made a US$106mn international public offering on the New York Stock Exchange, also aimed at raising financing for Bajada del Palo.

Recently, however, things have looked less rosy. Vista sued the Argentine federal government last month as a consequence of the oil price freeze enacted on August 26. Its CEO, Gastón Remy, has been one of the most vocal critics of the measure, saying it would make Vista's business unsustainable.

As BNamericas reported previously, before the freeze the company was anticipating huge growth in its operations over the next five years, jumping from eight unconventional wells to 300 in that period.

Vista operates the Bajada del Palo area in Vaca Muerta, which is split into the east and west concessions. The area is located in Neuquén province, on the border with Río Negro province. Vista added the Entre Lomas area to its portfolio when it bought the company of the same name. Entre Lomas is adjacent to Bajada del Palo on the Río Negro side of the border.

The company has conducted increasingly successful drilling operations, the most promising being the two unconventional four-well pads in Bajada del Palo Oeste in February and July.

The firm also acquired a controlling share of the Águila Mora area at the northern end of Vaca Muerta and far from its base of operations in the Médano de la Mora field, part of Bajada del Palo. In Águila Mora, Vista expects to begin spudding wells late 2020/early 2021.

Vista’s latest figures show average daily production of 32,800boe in August. The second pad at Bajada del Palo reached a peak production of 7,221boe/d.

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In addition to these loans, OPIC also cleared financing packages for two Argentine wind farms, 100MW Vientos Neuquinos and 100MW Energética. The packages are worth US$123mn and US$116mn, respectively.

As BNamericas reported previously, Vientos Neuquinos is owned by a partnership between provincial government entity Agencia de Inversiones de Neuquén and domestic firm Emprendimientos Energéticos y Desarrollos. The wind farm will be located in Neuquén province and is expected to go into operation in February 2020.

The Energética wind farm, meanwhile, is a JV between AES Corporation arm AES Argentina and Energética Argentina. The wind farm will be located in Buenos Aires province, close to the port city of Bahía Blanca, and is expected to enter operations in January 2020.

Both wind farms are being built by Norway's Nordex.

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