Argentina’s Aconcagua eyes global bond market, foray into shale

Oil driller Petrolera Aconcagua Energia SA is looking to sell an international bond, swooping into an opening for Argentine energy corporates that’s materialized with President Javier Milei’s free-market reforms, according to a person familiar with the matter.

Aconcagua’s finance team is in talks with banks that would manage the sale and expects to travel to the US early next year for roadshows, said the person, asking not to be named discussing internal matters. A public issuance or private placement are both on the table.

Company executives want to tap foreign markets because they can raise larger sums with longer terms, the person said.

The money would be used to finance existing operations and manage liabilities, and could provide a platform for Aconcagua — a small independent driller — to grow its production. Just this month the company extended key drilling licences in conventional fields, while it has been adding acreage in Argentina’s heralded shale deposits with a view to making an investment, the person said.

The Vaca Muerta shale patch in northern Patagonia is witnessing a boom that’s put Argentina on the cusp of becoming one of South America’s top-three crude producers. The deposit is also driving driving efforts to make the country a natural gas exporter.

Milei, a libertarian, is pursuing austerity and deregulation, including free oil markets. That’s opening up finance for shale pipelines and ports, which would remove bottlenecks for drillers and supercharge activity.

“One way the government can help is to stop intervening,” Daniel González, who oversees the Milei administration’s energy and mining policies, told a gathering of oil executives last week. On that note, González promised that the government would stop getting in the way of a law that gives Vaca Muerta oil drillers, including Chevron Corp, export and foreign-exchange benefits.

Aconcagua had been weighing an equity sale as the climate improves for initial public offerings. But those plans are on hold for the time being, the person said.