How large could Panama’s oil reserves potentially be?

URRIOLA: After many years of having questioned ourselves about if there is oil in Panama or if there isn't, we put together all the information that was in many different places and in many different offices. We contracted a consultancy service, and finally, we put all the information in digital form. We have all the information on all the geological surveys that have been done over the last 50 years. With that, we are prepared to call for bids for 8 blocks in the Darien province close to the border with Colombia. We will call for bids for 8 blocks, 4 offshore and 4 inland. We have the expectation to find, and the possibility to explore and exploit 900m barrels over the course of 15-20 years.

What is the status of the proposed gas pipeline linking Venezuela, Colombia, and Panama?

URRIOLA: The gas pipeline has been a project that was considered under the Mesoamerica Initiative. The Mesoamerica Initiative is an initiative set by the governments of Central America, including Colombia. There was a study of the Mesoamerican Initiative gas pipeline done in 2007 and financed by IDB. That possibility or that project has been brought to the table again during a conversation that President Chavez and President Santos recently had in Caracas. We look at that project with interest, not only for Panama but also for Central America, because Panama is preparing to establish or to build an LNG terminal on the Atlantic side, first for electrical generation purposes and in the next step for cooking and for transportation as well. There is a study and there is a renewed consideration between the Presidents of Venezuela, Colombia, and Panama to start looking at this idea again.

How will the expansion of the Panama Canal impact the energy sector?

URRIOLA: With the expansion of the Panama Canal, which is a $6bn project, there will be an increase in demand for bunkering. The bunkering service will grow. Panama is preparing to more than double bunkering capacity, from 6.3m barrels to almost 20m barrels, over the next 5 years. The Panama Canal expansion is bringing not only this but also an expansion of the port facility as well.

What plans are in place to develop refining capacity in Panama?

URRIOLA: Panama has an oil pipeline across the Isthmus, from the Caribbean to the Pacific side. It was built many years ago mainly to bring oil from Puerto Valdez (Alaska) to the coast of the United State via the Gulf of Mexico. Actually, Panama has allocated a large piece of land for any interest of any country or company to develop a refinery or petrochemical industry. In the past, Qatar and Oxy signed a memorandum of understanding with Panama to show interest in this project. This memorandum of understanding expired on December 28, 2008. We have a bilateral meeting with Qatar to see if they are still interested in going ahead with this project. Otherwise, we have other countries who are interested in going ahead with this refinery. The beauty of the refinery is that it would be built on the Pacific end of the existing oil pipeline. It would be the one and only large refinery to provide refined products to Central America because there is no other large refinery in Central America. That would be interesting, not only for Panama, but for the region.