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YPF plans to issue 760m dollars in bonds; Argentina fuel imports soar in June

Tuesday, August 14th 2012 - 08:08 UTC
Full article 28 comments

Argentina’s nationalized YPF oil and gas corporation will issue bonds for 3.5 billion Pesos (760 million dollars) as part of its push to reduce fuel imports by investing in domestic output, the energy company said in a letter to regulators on Monday. Read full article

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  • toxictaxitrader

    tell me,will these imports be subsidized ,when sold on? there is better use for that money,fuel industry infrastructure,please join the real world for your nations sake!

    Aug 14th, 2012 - 08:49 am - Link - Report abuse 0
  • LEPRecon

    Hmm, YPF to issue 760m dollars in bonds. What kind of dollars? US? Monopoly money?

    Enquiring minds want to know.

    It's quite amusing though, that since the 'nationalisation' of YPF, Argentina has had to increase it's oil imports!

    That's TMBOA's great economic model in practice.

    Aug 14th, 2012 - 10:20 am - Link - Report abuse 0
  • Conqueror

    Let's see now. “The nationalized corporation also informed that in the first five first months of the year overseas purchases of fuel had dropped significantly, but the Secretary of Energy also revealed that on the sixth month, last June, YPF imported a record 190 million dollars of different fuels.

    The 190 million dollars is almost similar to the total imports of the first five months of 2012 and well above the average of the previous administration. Compared to June 2011 imports were up 21%.”

    Now when was it the government stole the company? May? So Repsol-YPF had managed to “significantly” reduce fuel imports. Then the government stole YPF and promptly had to double imports. And this is good for argieland....how? And they did this by using another 17% of refining capacity? Does anybody think that if they'd had more “spare” refining capacity they might have increased imports even more? They don't know what they're doing, do they?

    Aug 14th, 2012 - 11:58 am - Link - Report abuse 0
  • EnginnerAbroad

    @3 Exacly what I was thinking. The reason we were all told that CFK nationised YPF was to reduce the fuel import bill. What Argentina is seeing is exacly the opposite with the fuel import bill rising, whereby sucking more of the ever diminishing stack of dollers from the economy, hence the need to tighten dollers restrictions. These things are not independent of each other they are all linked.

    In May CFK made a populrist decision to nationilse YPF in order to bolster her flagging politcal support (current opion pools here in Argentina put her at arounf 40%). Not only has this lead to fuel shortages (not surpisingly in the same first five months that they say imports were down), it has also destryoed the reputation of Argentina as a serius country to do buisness in. YPF has been told by The USA they want nothing to do witht he oil and gas industries and even China has said they have no intrest on YPF. Argentina therefore has no other choice now that to sell YPF to Venezula, in fact the way things are going CFK will become puppet president for Chavez and Argentina a vassal nation of Venezula.

    When will CFK admit her decision to nationilise YPF was wrong, reckless and born out of shoirt term populirst gain.

    Aug 14th, 2012 - 12:34 pm - Link - Report abuse 0
  • Welsh Wizard

    @3

    Prima facie your reading does seem to be correct however, I wonder if something has been lost in translation as, otherwise, this would seem to be a shocking set of results. I'm also suprised that they would even release this information. Can anyone confirm if this is the case?

    Aug 14th, 2012 - 12:40 pm - Link - Report abuse 0
  • EnginnerAbroad

    @5

    I would guess the values are correct and are a legal requirment for YPF when issuing the bonds. i.e. they have to give the foreign markets information on their current financial situtation. if they didnt they could lead themselves open to law suits in the future.

    Wether this information is circulated in the Argentina press is another matter. It didnt make it into the Buenos Aires Hearlds copy of the story for example.
    http://www.buenosairesherald.com/article/108827/-ypf-to-issue-0-million-in-bonds
    Althought they did report an increase in year on year profits to $181 M. Oh well not even close to the $7Bn needed for investment this year alone even if they sell all the bonds issued.

    Aug 14th, 2012 - 12:49 pm - Link - Report abuse 0
  • Simon68

    Interestingly, the refinery at La Plata was built by Repsol/YPF for exactly the purpose of increasing local production of diesel, Kretina has adopted it as her own idea.
    This was part of the non investment of Repsol!!!!!

    Aug 14th, 2012 - 01:05 pm - Link - Report abuse 0
  • yankeeboy

    If I remember correctly, starting late last year YPF was prohibited from using U$ to buy fuel and at the same time being sanctioned for not supplying fuel to the ARG market. Now they are forced to keep a good supply on hand because not it is ARG gov't problem and not “THE OTHER”.

    I don't see this getting any better any time soon. They lucked out with a warm winter this year.

    Collapse is immanent I am wondering why the population is so apathetic.

    Can you imagine if you couldn't get currency to travel? Or if your kid was in school in the USA UK EU and you couldn't send him $.

    What i find pretty amazing is the grey mkt U$ is over $6.50 even with the HUGE influx from the bond payments! When they levels out whew watch out below!

    Frightful set of circumstances and highly illegal in civilized countries...but I guess ok in banana republics.

    Aug 14th, 2012 - 01:18 pm - Link - Report abuse 0
  • jerry

    Perhaps this bond issue is to pay for the new plant which CFK wants to build in the future? It will never get done, but a major U.S. construction company is putting together a bid to build a new refinery in Argentina. The site for the refinery has not even been determined yet. Maybe CFK will claim in the future that the La Plata refinery is the new one and the money will disappear in her pocket.

    Aug 14th, 2012 - 02:05 pm - Link - Report abuse 0
  • Welsh Wizard

    @8 Interestingly, some commercial contracts have started using the grey rate as the official rate for contracts, the obvious reason being that a commercial contract is based on commercial realities and the $6.50 is a commercial reality. As such, a form of devaluation is already starting which will only push this level even higher. With regards to you question on apathy, well, it is called a dollar “clamp” of a reason rather than being called a total prohibition. The clamp has acted slowly and only bit by bit are people realising that their human rights have been eroded. The most successful erosions of human rights in the 100 years have always started and continued with small steps to make it almost impossible for the population lash out. At what point should people have lashed out? When it was only 25% of salary? When it was only for travel? When you could only buy US$ for travel the day before you go? When the threshold was set at $70 day? Lash out at any of these points and you would be branded as a crazy person who is over-reacting, as a danger, as someone who is one of them, as someone who does not have the best interests of the country at heart and lastly as someone who needs to have their tax records inspected by AFIP…

    I see it when I speak to Argentinean friends over here and in Argentina. Each time a new measure is introduced they admit that they don’t like it and it angers them but feel that it doesn’t so far as to materially impact them. However, when you take the whole clamp as it were it does materially impact them. I have an intense dislike for these types of actions that go against every value of libertarianism.

    Aug 14th, 2012 - 02:07 pm - Link - Report abuse 0
  • yankeeboy

    10. The problem with having multiple exchange rates is just what you described. People will start to demand the highest return on their investments regardless of the gov't rate.
    I hear in Uruguay it's 8/1 now with a $3000 max. I wonder what it will be in Summer!
    Rgs deserve the misery they endure since it is all self inflicted. Time and again they refuse to “do the right thing”, “take the esasy way out” prefer short term solutions over long term. These foolish measures has destroyed 4 generations of people's wealth and it is only going to get worse.
    I hope the population wakes up sometime soon. Maybe at 10/1 or when BA, Sante Fe, Cordoba start to issue Patacones. It is not too far away now.

    BTW the U$760 is a way for CFK to get more U$ into the treasury and print more Arg$. YOu know they Arg Fed still can't issue Int'l bonds. That is the real reason she needed YPF. Watch and learn.

    Aug 14th, 2012 - 02:16 pm - Link - Report abuse 0
  • Welsh Wizard

    Yup, very obvious that YPF is effectively her gateway to the international bond markets. Although, if was structuring this deal, there is no way I would don it without a considerable amout of US$ in escrow outside the country pledged to a security agent in favour of the noteholders...

    Aug 14th, 2012 - 02:36 pm - Link - Report abuse 0
  • Beef

    So energy imports in the summer and start of winter were low but they have since sky rocketed! Farkin hell, is there anybody with half a brain in Argentina to point out that that is bloody obvious!

    Aug 14th, 2012 - 04:12 pm - Link - Report abuse 0
  • ChrisR

    Two things not so far mentioned (as far as I can see):

    1) who in their right mind will actually pay money for these 'Bonds'? Only an idiot or somebody who has never heard of TMBOA and her robbing ways (is there anyone?);

    2) significant purchase of Type 3 shows that the refining technology presently used is woefully incapable of keeping up with modern vehicle design. All the cars beloved by wealthy Argies such as diesel Mercs, BMW, etc have to use this fuel to keep from wrecking the engine fuel injector system. It seems even the latest diesel refinery built by Repsol / YPF is unsuitable for the production of this fuel.

    It would appear that the imports of these types of fuels will only increase thus draining what few dollars TMBOA has disclosed that the country possesses.

    All good news then!

    Aug 14th, 2012 - 04:40 pm - Link - Report abuse 0
  • Pete Bog

    I thought Argentina was amajor exporter of bio-fuels! Crikey they are in a mess!

    Aug 14th, 2012 - 08:36 pm - Link - Report abuse 0
  • yankeeboy

    One thing most outsiders probably don't realize is that ARG promoted Nat Gas for individual cars. Most of the cars in BA ( don't know about the rest of the country) have been retrofitted and have a CNG (?) tank in their trunk. I guess they promoted it years ago when they actually had some reserves. Doesn't work too well when you have to import that too!
    Mess.

    Aug 14th, 2012 - 09:20 pm - Link - Report abuse 0
  • ChrisR

    @16

    I can understand LPG, CNG (methane) requires much different storage and very high pressure tanks on the vehicles which makes them unsuitable for cars.

    A friend of mine was awarded an MBE for services to CNG in the automotive sector, but that was only for heavy trucks.

    Even LPG (propane) needs a petrol based feedstock so would need to be imported.

    Aug 14th, 2012 - 09:29 pm - Link - Report abuse 0
  • yankeeboy

    I don't know what kind of Nat Gas is used it is probably LPG then. I have no knowledge of those types of things. My driver wanted me to put one in my car and I told them no because there was always huge lines to get the gas and it took forever to fill it up then they had a limited range. I didn't see the benefit.

    Aug 14th, 2012 - 09:43 pm - Link - Report abuse 0
  • Welsh Wizard

    National Mint has been expropriated by the government (after the scandal surrounding the MP, a mate of his and contracts being awarded) and a member of La Campora has been appointed as its head. This is definitely not a case of “contracts for the boys” (which is totally unacceptable so therefore we must expropriate) followed by government sponsored “jobs for the boys”. La Campora is entering into every part of government.

    I assume that the next step will be the new head saying that he is going to issue a review which will take 100 days aimed solely at trying to increase production...after all, to keep up with the increase in monetary based they will have to get those printing machines working overtime.

    Aug 15th, 2012 - 09:17 am - Link - Report abuse 0
  • Conqueror

    @5 “lost in translation”? What phrase does one use to explain translating stupidity into intelligibility?
    @7 Not surprised. She does like to steal, doesn't she?
    @13 Simple answer? No! But then you knew that.
    @18 Your driver? Wow. But there IS a real benefit to LPG in argie vehicles. It REALLY explodes!

    Aug 15th, 2012 - 01:07 pm - Link - Report abuse 0
  • yankeeboy

    20. Driver/Body Guard ex military, ex-truck driver, very nice guy, super intimidating and very good at getting me out of certain situations while I was there.

    Aug 15th, 2012 - 04:02 pm - Link - Report abuse 0
  • nigelpwsmith

    Although I was aware that Argentina was falling apart economically with their trade restrictions, I had no idea that the oil/fuel crisis was so well developed, that it is only a matter of time before they start rationing fuel for vehicles, or even flog their oil industry to Venezuela on the cheap.

    The trouble is that I've been under the impression that Argentina's sabre rattling was merely preparing the ground for an attack on the Falkland Production Platforms in the next couple of years. But if the fuel crisis is this bad, then La Kretina will need a 'diversion' sooner than we think.

    I wonder how many suitcases of money Chávez will be sending TMBOA. If he sends her a cheque, she'll have to cash it quick, just in case Hugo kicks the bucket beforehand.

    It might help if HM Gov deploys a full squadron of Typhoons to MPA, as well as the entire Ghurka regiment & commissions HMS Ambush early. Looks like we'll need them.

    Aug 15th, 2012 - 05:09 pm - Link - Report abuse 0
  • British_Kirchnerist

    The commentary on here is deranged. I suggest people come back in a few years and see if any of these prophecies of doom have happened. The idea of bonds to get round a temporary money shortage is surely a good one, like our own Victory Bonds in the war...

    Aug 15th, 2012 - 06:18 pm - Link - Report abuse 0
  • nigelpwsmith

    @23 BK, you should take note of these gentlemen. Not only do they know the oil industry, but they've actually lived and worked in Argentina.

    They know that this country is collapsing. It's apparent to many outsiders. It appears that it may be a great deal sooner than previously estimated. Let's hope (for your sake) that La Kretina doesn't blame you for her downfall when she is strung up. After all, you were supposed to be the 5th column working against the evil empire trying to bring her down.

    Aug 15th, 2012 - 07:09 pm - Link - Report abuse 0
  • ChrisR

    @23 Blind_Scottie_Kirchnerist

    Yes, you are quite correct about the Victory Bonds, BUT they were paid back. Your own stupid vision of TMBOA consistently skews any reasoned intelligence you may once have had in this matter.

    YPF Bonds are going to fail, simply because anyone with half-a-brain knows that they will never be able to redeem them. They will be up against the Argie mentality of 'we don't have to pay the principal back if we have paid the interest'.

    The Argies are simply dishonest and have been brought up that way starting with their teachers feeding them a bunch of lies. At least children have that excuse.

    You, on the other hand are nothing but a traiterous Scott toward Britain: you have NO excuses.

    Aug 15th, 2012 - 07:14 pm - Link - Report abuse 0
  • St.John

    I doubt the YPF Bonds are going to fail.

    They will be bought discretely by the Argentine national bank, and it will be called a success issue.

    Aug 16th, 2012 - 04:33 am - Link - Report abuse 0
  • KretinaK

    This is how business is done in Argentina!.......Long live the crushing burocracy and bribery system!
    http://www.youtube.com/watch?v=-dOqouGS0xQ

    Aug 16th, 2012 - 05:29 am - Link - Report abuse 0
  • Simon68

    If YPF manages to flog these bonds, Kretina will use the cash to shore up the peso in a crazy rearguard action to save face on the world stage.

    She hasn't a chance, as no one is going to buy into YPF and with US$760 million YPF will not be able to do a damn thing!!!!!

    Aug 16th, 2012 - 05:02 pm - Link - Report abuse 0

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