If you drive between David and Bocas del Toro, you will see a large pipeline running along the road near lake Fortuna. This pipeline was put in may years ago to run oil from the Pacific to the Caribbean. Over the last year they have reversed the flow to go from the Atlantic to the Pacific and built large container tanks on either side in order to increase storage capacity. This is nearly a $500 million investment into the new system. During the last administration there were serious negotiations going on between a consortium including Occidental Petroleum and Panama to put in an oil refinery in Chiriqui which was an investment of about $8 billion. During the 2008-2009 economic turmoil this project was put on hold, but recent mandates by the U.S. government to stop all oil production in the gulf have made it more viable to put in the refinery. I have heard rumors that the Chiriqui refinery is back on track, but one more major hurdle of dealing with the workers unions that must be settled. Current labor laws are prohibitive for large investments of this kind.
Here is a machine translation of the article from La Prensa
Rafael E. R. Berrocal
Petroterminal of Panama, a joint venture where the Panamanian State has a 50% stake, completed its first phase of expansion within a project whose total investment amounts to 480 million dollars.
This made it possible to reverse the transfer of oil from the Atlantic to the Pacific through its inter-oceanic pipeline, to increase their reserve capacity of 5.6 million barrels to 9 million.
Despite this, the company moves from one ocean to another, only 300 thousand barrels of crude oil for Castor Petroleum, Tesoro Panama Company and British Petroleum. But Petroterminal hopes to increase this flow in the short term to use his maximum capacity racking that is 800 thousand barrels of oil.
The manager of the company, Luis Roquebert, said he is running the second phase of expansion that includes construction of 10 storage tanks for British Petroleum, increasing the park to 27 tanks with total storage capacity of 14 million barrels . "When these tanks are completed, British Petroleum crudes should be bringing any other country in Africa and the Atlantic area," said manager Petroterminal.
However, the company not only looks forward to its three existing customers will increase the traffic of oil contracts. "We are looking for new clients and business opportunities that lead to better utilization of our system," said Roquebert.
The company recognizes that the operations of Castor and Tesoro Petroleum Company Panama have been a "little slow" during this first year, because they are in full development of its logistics procurement of various oils in the Caribbean and the Atlantic.
The crude is being received in Petroterminal mainly from Colombia, Venezuela and some African and North Sea.
The current market for these items are the refineries in the U.S. west coast, "but China is the long term as a great power that much demand for that oil and we are preparing," said Roquebert.