Earlier this year there were a number of articles in the local paper about oil refineries being planned in Panama, one of them here in Chiriqui. Last week a short article appeared where the government is being accused of dragging its feet on the project by a legislator who represents the area. He says the area desperately needs the jobs that will be created. There was a feasibility study being performed by OXY-Qatar who proposed the project and it was to be revealed this month. My sources tell me that the company has completed the feasibility study which deals mostly with logistics of construction and location and they have come out positive. There remains to be resolved some onerous labor law issues and immigration for the many foreign workers with special skills that will be required. The biggest hurdle still facing the project is the significant increases in construction costs over the last year or so since the project was porposed. They still need to justify the project from a financial standpoint.
Most of the people I know in the area are in favor of the project because of the economic benefits it would bring to the area. Obvioulsy there are many who are also concerned about the environmental aspects of a refinery. The project was slated to cost over $9 billion, being nearly twice the amount projected by the ACP for the canal expansion.
Minister defends oil refinery project
An update by Ministra de Comercio Carmen Gisela Vergara on the progress of the project to build an oil refinery in Puerto Armuelles generated controversy yesterday in the Asamblea Nacional. Legislator Osman Gómez, who represents the area where the refinery will be built, accused the government of dragging its feet on the project.
Gómez said the project is badly needed in the area, which has suffered a massive amount of unemployment since the banana industry began to experience economic woes.
In 2005, unemployment in the region was estimated at 45 percent. Vergara, on the other hand, said that the project needs to be examined carefully by the government, which explains the four-year timetable that has been established for it. Vergara said that the government has commissioned several studies to ensure that the project is environmentally and economically feasible.
OXY-Qatar Petroleum plans to invest $9 billion in a refining and processing plant capable of handling 350,000 barrels of crude oil per day.