Chevron’s Argentine energy gamble not so reckless 17 Jul 2013 The energy group is wagering $1.24 bln on a shale project just a year after the nation seized assets from Spain’s Repsol. That shows a strong stomach not a short memory. With the world’s No. 2 gas reserves on offer, Chevron’s audacity may help it outflank fainter-hearted rivals.
Repsol can wring a better deal for losing YPF 27 Jun 2013 The Spanish oil major had to snub Buenos Aires’ tentative compensation offer for the expropriation of its Argentinian subsidiary. It wants $11 bln. The state’s package wasn’t worth the $5 bln ascribed to it. Repsol may never get full recompense. But it can hold out for more.
U.S. courts make mark in Argentina creditor spat 22 Apr 2013 Judges have, unusually, tried to broker a deal between the Latam nation and hedge funds still objecting to debt swaps in 2005 and 2010. Ordering Argentina to honor its contracts and pushing others to clarify theirs were also useful moves. The rule of law is coming out ahead.
Argentina may finally be picking up some toys 27 Mar 2013 The country’s government has thrown many from the pram in its fight to avoid paying anything to bondholders unhappy with a default settlement. Now ministers seem to be considering paying with new securities. It might not win over holdouts yet. But it’s an encouraging sign.
Brewing Latam defaults could prompt 1980s re-run 5 Mar 2013 Argentina may stop all debt payments to avoid paying holdout creditors from its last default 11 years ago, and Venezuela’s credit looks shaky. The danger is that one failure to pay sparks others in the region, and even virtuous borrowers like Colombia are cut off from credit.
Brazil’s ailing oil industry needs a nudge 13 Dec 2012 Petrobras can’t meet output targets. The fallout from Chevron’s spill is making it hard for companies to hire. And Eike Batista overhyped OGX, whose value has plummeted. The country’s once-promising oil bounty is going to waste. A revival may need fresh thinking from Brasilia.
Argentina should grab chance for hedge fund peace 29 Nov 2012 A U.S. court has put on hold an order forcing the nation to pay holdout bondholders. That creates a window to settle an 11-year debt dispute that has blocked Argentina from global capital markets. Compromise could help the country’s economy and affirm that a deal is still a deal.
What do bullish investors see in Argentina? 27 Nov 2012 Latin America’s third-largest economy is losing a debt restructuring battle with hedge funds, faces questions about its ability to stay solvent and suffers from mounting domestic discontent. But some investors reckon Argentina’s plentiful energy reserves offer a ray of hope.
Rule of law finally catches up to Argentina 29 Oct 2012 The nation exploited fuzzy language to stiff debt-swap holdouts. As Breakingviews predicted, a U.S. court ordered it to pay up, saying a promise to treat creditors equally is plenty clear. Rather than spark market chaos, the ruling sends the message that deal terms have teeth.
Navy vessel caught in hedge fund Argie-bargie 4 Oct 2012 Elliott Capital has seized an Argentine tall ship. It’s the latest twist in a decade-long legal saga to pry a better deal from the country on its defaulted bonds. Argentina screams extortion and wants U.N. support. But Elliott’s move is a win of sorts for creditor rights.
Argentina’s new YPF out to prove it’s no PDVSA 31 Aug 2012 Repsol’s old stake in the energy company was snatched by the government. But now YPF is touting itself as a well run, commercial operation. It wants to borrow in international markets and needs partners like Exxon and Chevron. They have a chance to strike decent deals.
Disputes give WTO chance to prove it has cojones 23 Aug 2012 Complaints lodged with the trade body have doubled this year, including a big case against Argentina. That’s to be expected as economic woes encourage protectionism. But with Russia joining, the WTO now includes the top 30 exporters. That may lend it some much-needed influence.
Greek lesson encourages can pay, won’t pay states 20 Aug 2012 Belize is trying to force a restructuring. The Caribbean nation is more or less solvent, but its cash is precious and its debt expensive. Foreign creditors have limited leverage, as the Greek and Argentine examples show. They can lose their shirts even if countries don’t go bust.
Argentina’s leader sabotages her own energy goals 7 Aug 2012 YPF needs funds to lift production and develop shale deposits. Yet Cristina Fernandez already scared investors by seizing Repsol’s stake in the state-controlled energy group and she is still holding back the industry. That makes YPF’s ambitious targets look far-fetched.
Argentina leader follows reckless Venezuela recipe 19 Jul 2012 President Cristina Fernandez is cooking up the same short-sighted economic soup as Hugo Chavez. So far her intrusions on private enterprise and the central bank look relatively minor. But Chavez’s history suggests more is to come. And Argentina isn’t as well placed to stomach it.
Argentina’s heavy hand now puts squeeze on banks 6 Jul 2012 Fresh from nationalizing YPF, President Cristina Fernandez now wants to strong-arm banks into subsidizing loans to businesses. The move shouldn’t have too big an impact on bank profits, but it marks an escalation in her war on private enterprise which may spread further.
Warning: emerging economies can go backwards, too 3 May 2012 Bolivia has followed Argentina in the pointless nationalisation of Spanish-owned assets. Argentina is fiddling with its central bank, as Hungary tried to. The obstacles to growth in emerging economies can be large. Investors should beware. Emerging economies can go down as well as up.
Oil majors can’t afford to shun Argentina 20 Apr 2012 Beyond the YPF asset grab, Cristina Fernandez may overhaul the entire energy sector. But Argentina’s shale is too important to ignore and Big Oil knows how to navigate tricky regimes, including Venezuela’s. Even with risks higher and returns lower, the long game could pay off.
Argentina’s oil-asset grab is both normal and odd 19 Apr 2012 The decision to take control of YPF puts Argentina in the oil industry mainstream - 75 percent of global production comes from government-controlled companies. What is odd, though, is the desire to micromanage the company and the willingness to annoy the rest of the world.
Repsol nearly pricing in the worst 17 Apr 2012 The Spanish energy group has been hard hit by the expropriation of most of its shares in Argentina’s YPF. Investors are pricing in zero compensation and wipeout on a YPF-backed loan. But with the strategy upended and a long legal fight ahead, the market pessimism is justified.