Asset managers Patria Investments Ltd. and Eaton Vance joined a group of about a dozen banks in financing a US$3-billion oil pipeline project which is seen as pivotal for Argentina’s energy industry, people familiar with the matter said.
The syndicated loan agreement, signed almost two weeks ago, is the largest commercial facility for an infrastructure project in the history of the South American nation, according to a press release for the project titled Vaca Muerta Oil Sur, or VMOS. A list of 14 institutions, including international lenders like Citi, Deutsche Bank, Itaú, JP Morgan, and Santander, provided a total of US$2 billion in financing.
Patria, which is not named in the release, was the largest single investor in the group, according to one of the people, who asked not to be named as the information is not public.
A spokesman for VMOS did not respond to a request for comment on the involvement of Patria and Eaton Vance. Patria did not respond to a request for comment. Eaton Vance declined to comment.
The loan is intended to help a consortium of oil drillers pay contractors to build a brand-new cross-country pipeline and Atlantic port to ship Argentina’s growing output of shale oil.
The project is poised to be transformational for drillers tapping vast reserves of shale in Patagonia. That is because it will bust open a transportation bottleneck that is held back development, paving the path to more than double production of shale oil to some one million barrels a day in just a few years.
The VMOS consortium includes Argentina’s biggest oil drillers — state-run YPF SA, Vista Energy and Pan American Energy Group, which is 50 percent owned by BP Plc — as well as majors Chevron Corp. and Shell Plc.
The US$2-billion syndicated bank loan that Patria and Eaton Vance joined will fund about 70 percent of the project. VMOS partners will pay for the remainder through equity stakes with their own funds.
TIMES/BLOOMBERG
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