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YPF is in early talks with XRG, an overseas arm of Abu Dhabi National Oil Co (ADNOC), to invest in a liquefied natural gas (LNG) project, which aims to turn the country into an LNG exporter by developing a floating terminal linked to the Vaca Muerta shale basin. The project, backed by Shell and Eni, could eventually produce 28 million tons of LNG annually. However, no final investment decisions have been made. XRG’s discussions are preliminary, and it may still opt out. The move aligns with ADNOC’s global expansion strategy, as XRG builds its LNG and gas portfolio following investments in NextDecade’s Rio Grande LNG (US), and acquisitions in Africa and Central Asia, though it recently dropped a $19bn bid for Australia’s Santos Ltd. The talks come amid renewed investor optimism in Argentina after President Javier Milei’s party’s midterm victory, which strengthened his pro-market agenda.
YPF’s dollar bonds rallied yesterday – for instance its 8.5% 2029s jumped by 2.2 points to trade at 102, yielding 7.83%.
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