Buenos Aires Times

The Russian connection: Lukoil to invest in Grupo Indalo

Rosner’s OP Investments presented a “strategic plan” that calls for a US$300-million cash injection and the support of Lukoil, the only major Russian company that is not directly owned by the state.

Sunday 19 November, 2017
Indalo, one of the 170 enterprises (intended to be) sold to OP Investments.
Indalo, one of the 170 enterprises (intended to be) sold to OP Investments. Foto:Cedoc.

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As Kirchnerite businessman Cristobal López finds himself deeper in the rabbit hole that could lead to his jailing, an interesting turn of events have led to the potential entry of Lukoil, the second-largest private oil company in the world, into the Argentine energy market. Interesting not only because of its complexity but also strategically and geopolitically, coming at a time when President Mauricio Macri appears to be aligning his foreign policy with China rather than their former Soviet “frenemies.” And while most of this would have been relegated to the economy pages of national papers, it takes on added significance because López’s Grupo Indalo includes highly visible media assets like news channel C5N and Radio Diez, which he was forced to buy from Daniel Hadad at the orders of Cristina Fernández de Kirchner.

With nearly 200 million pesos in rejected cheques and fiscal debts of somewhere between 8,000,000 to 10,000,000 pesos with the AFIP tax agency, Grupo Indalo — a network of 180 companies put together by López and his partner Fabian De Souza with the implicit and explicit support of Néstor Kirchner — is effectively bankrupt. López, who was the last owner of the Buenos Aires Herald and killed off the ailing paper, is facing a barrage of legal accusations – including tax evasion, money-laundering, and being part of an illicit association alongside CFK and her children – that could very well lead to his incarceration. Especially in these days of selectively aggressive justice. Both López and Indalo are judicially embargoed.

Last month, a little-known investor representing a mystery fund came forward as Indalo’s white knight. Ignacio Rosner, with a past in companies like Grupo Clarín and the Macri Family’s Sideco, announced he was acquiring all of Indalo’s shares through OP Investments. Speculation spread like a forest fire, as Perfil reported the company changed hands for a symbolic 100 pesos.

While Rosner and his crew claim they have operationally taken over Indalo, any acquisition would require the approval of Federal Judge Julian Ercolini and, most improbably, of AFIP boss Alberto Abad. In their attempt to unlock this situation, Rosner’s OP Investments presented a “strategic plan” that calls for a US$300-million cash injection and the support of Lukoil, the only major Russian company that is not directly owned by the state. According to EconoJournal’s Nicolas Gandini, Lukoil Pan-Americas is set to sink US$80 million in working capital and offer 100 million pesos in convertible debt. The Russian oil giant would gain access to Indalo-owned Oil Combustible’s assets, which include the strategic San Lorenzo refinery in the Port of Rosario, along with a network of 360 stations and existing stocks of crude.

Lukoil’s involvement in the deal was absolutely unexpected. With 16.4 billion barrels of oil equivalent in proved reserves and daily production of 2.2 million barrels, the integrated Russian giant is only second to Exxon Mobile among private oil companies.

The company is run by its founder, Vagit Alekparov, the only Russian oil mogul who has managed to stay out of Vladimir Putin’s way. Alekparov, the son of an oilman who rose to become deputy minister of oil and gas in the USSR, founded Lukoil during Mikhail Gorbachev’s perestroika, taking charge of the then recently privatised integrated energy giant in 1993. Slowly but surely, Alekparov increased his stake in the company, having spent some US$4 billion picking up shares and taking his stake to about 23 percent, according to Bloomberg. He’s the sixth-richest Russian, according to Forbes, which pegs his net worth at US$14.4 billion. On his desk, Alekparov has a single photograph: a black-and-white portrait of Putin. “I’m not close to Mr. Putin, but I treat him with great respect,” he told the New York Times in a 2004 article.

Given its financial firepower, Lukoil could have entered the Argentine market through a much larger deal that would give it a stronger foothold, such as buying Shell’s Argentine assets which are on the selling block.

Yet, the company could have a strategic interest in the region, after doubling-down on Mexico through an initial agreement with Pemex and a stake in offshore blocks in the Gulf of Mexico. It’s also interesting to note that there are no Russian companies operating in Argentina’s energy sector. The Macri Administration, particularly under ex-foreign minister Susana Malcorra sought stronger relations with China. Indeed, the body language between Macri and Putin suggested some distance, after the Russian Premier stood Macri up during last year’s G20 Summit in Hangzhou.

It remains to be seen whether the courts allow the operation to prosper, yet everything suggests OP plans to keep Indalo’s media assets. Alekparov’s Lukoil then would be C5N and Radio Diez’s business partner, and maybe even financier. With close ties to Putin, the question of the Kremlin’s involvement in Argentina’s national affairs is begging to be asked. For now, we’ll have to wait and see.


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