Argentina’s Oldelval greenlights US$100mn bond sale

The board of Argentine oil pipeline concessionaire Oldelval approved the placement of up to US$100mn in bonds.

The planned sale falls under a US$500mn debt issuance program. 

Oldelval is carrying out a project to expand transport capacity between the fast-growing Neuquén basin and export facilities in Puerto Rosales, Buenos Aires province.

Last year company officials said they would add 50,000m3/d of new capacity, up from the previously announced 36,000m3/d, ramping up capacity to 86,000m3/d.

Basin producers are targeting the export market and have been ramping up output, in turn, straining the existing 36,000m3/d nameplate capacity duct, which is running at around 43,000m3/d, partly via use of polymers to boost compression.

In a presentation last year, Oldelval said the original 36,000m3/d expansion would cost around US$750mn.

Oldelval is jointly owned by Chevron Argentina, Pampa Energía, Pan American Energy, Tecpetrol and YPF.  

The new capacity is scheduled to be phased in during 2024-25. 

State-controlled YPF is mulling building its own pipeline, connecting the basin to a planned new terminal earmarked for Río Negro province. The company recently said it was in talks with potential partners. 

Neuquén province, home to the bulk of the fast-growing Vaca Muerta unconventionals formation, has said it was eyeing production of 1Mb/d (million barrels per day) oil by 2027-2028, a major leap from the 328,082b/d registered in April. About a quarter of the jurisdiction’s output is exported. 

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Argentine federal energy chief Flavia Royon said Chinese energy firm Power China was interested in financing the second phase of the Vaca Muerta gas pipeline project.

The first publicly funded phase is due to enter service by around the end of June.

In parallel, cash-strapped Argentina is in talks with Brazil over financing, via Brazilian development bank BNDES, of exports to Argentina of materials, such as pipes, needed to build the second phase. 

Argentina sees Brazil as a potential future offtaker of Neuquén basin gas. Brazil sometimes imports Argentine gas to fuel a power station. 

ALSO READ: Argentina's US$3.5bn gas pipeline project

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Challenger Energy said a formal farm-out process corresponding to its OFF-1 block offshore Uruguay had started. 

The Isle of Man-registered upstream firm aims to complete a farm-out by the end of the year, with a goal of fast-tracking 3D seismic acquisition in 2024.

Challenger has been carrying out 2D seismic reprocessing, interpretation and mapping work under minimum work obligations. Three prospects have been identified. 

A volumetric assessment indicates a total estimated ultimate recoverable resource of around 2.0Bboe (billion of barrels of oil equivalent) across all three prospects (Pmean, unrisked), and over 4.9Bboe in an upside case (P10, unrisked), a regulatory filing said.

Challenger signed a 30-year license for the 15,000km2 block last year.  

Discoveries off West Africa in geological formations analogous to those of Uruguay, along with the country’s stable operating environment, have spurred the interest of E&P firms, according to state hydrocarbons company Ancap.

Offshore exploration in Uruguay gathered pace in 2016 with France's TotalEnergies drilling the first well in around 40 years. Oil and gas shows have been reported, but no commercial discovery has yet been made.