Milbank LLP advised the joint lead arrangers in connection with VMOS S.A.’s transformative $2 billion syndicated secured term loan facility to finance the development of the Vaca Muerta Sur Oil Pipeline project in Argentina. This historic transaction, which is the largest commercial loan for an infrastructure project to date in Argentina, will support the development and construction of a major oil pipeline and related infrastructure that will significantly expand Argentina’s energy transportation capacity and support oil exports.
VMOS S.A. is a joint venture involving Argentina’s top oil and gas companies YPF, Pan American Energy, Tecpetrol (from the Techint group), Pampa Energía, Pluspetrol, Vista Energy, Shell Argentina and Chevron Argentina.
The Vaca Muerta shale oil and gas formation represents one of the world’s largest shale hydrocarbon deposits. Its development is at the core of the Argentine government’s economic strategy, which places strong reliance on realizing the country’s hydrocarbon resources and becoming a major exporter (something Argentina had not achieved before) to fuel economic growth. However, until, the exploitation of Vaca Muerta’s energy potential has been limited by a lack of transport and processing capacity. As such, the VMOS financing represents a key milestone in overcoming these logistical constraints.
This transaction is also the first financing of a significant project under Argentina’s new investment promotion regime (RIGI) and is one of the top oil and gas financings across Latin America in the recent past. Once operational, the pipeline is expected to play a central role in facilitating the transportation of domestically produced oil extracted from Vaca Muerta to key consumption and export markets, unlocking the full potential of Argentina’s oil reserves.
The Milbank deal team was led by Corporate Finance and Securities partner Carlos Albarracín, along with Global Project, Energy and Infrastructure Finance partner Alec Borisoff, special counsel Fernando Capellão and Justen Fleming and associates Johann Sarna, Samuel Smith, Chloe Sykes and Claire Xu; Global Risk & National Security partner Bijan Ganji and associate Bridget Golob; Tax partner Andrew Walker and associate Michelle Song; and Alternative Investments partner Catherine Leef Martin.
