One day after the Argentine government extended the deadline to legalize undeclared cash, energy company Bridas International gave new life to the BAADE energy bonds, the most relegated portion of the whitewash scheme, by saying it would snap up 500 million dollars of the paper.
The move gives Bridas a way to invest in the Vaca Muerta formation without risking legal action from Spanish firm Repsol. Bridas, controlled by the powerful Bulgheroni brothers, took pains to highlight its investment, which would be destined to developing unconventional resources, would not involve undeclared cash.
“The investment will not be less than 500 million dollars and has the objective, among others, to invest on unconventional energy projects,” the company said, adding that the move has nothing to do with the whitewash law since it is a foreign direct investment by foreign residents.
“By doing this Bridas confirms its investment process in Argentina,” the company added.
The tax amnesty program offers citizens the possibility to turn undeclared cash without paying back taxes or needing to specify where the money came from. BAADE energy bonds offer a 4% annual interest rate but any investor can snap up the paper that matures in 2016.
Only 26 million worth of BAADE bonds have been sold so far.
Bridas move to snap up the bonds comes after the company sealed a preliminary memorandum of understanding with YPF in late 2012 to exploit shale oil reserves in the areas of Bajada de Añelo and Bandurria in Vaca Muerta. The agreement contemplated an investment of 1.5 billion dollars but expired 60 days after being signed amid pressure from Repsol.
Even though Bridas did not reveal details on the bond subscription it did say it would begin to disburse the cash “as the projects reach final agreements,” implying there were already negotiations for specific works, and the State would not be able to use the money on just any initiative.
Bridas owns a 40% stake in Pan American Energy, which is majority owned by UK’s BP and is the second-largest hydrocarbons producer in Argentina.
Bridas is an oil company owned by the Bulgheroni brothers, ranked by Forbes as the richest men in Argentina. In March 2010 the Chinese firm CNOOC bought half of Bridas assets for 3.1 billion. A year later Bridas bought a refinery and 450 fuel stations from ExxonMobil (ESSO) in Argentina, Paraguay and Uruguay. The company is currently carrying on an expansion of its refinery in Campana and expects to invest one billion dollars on the project.