While the Panama Canal Expansion has gotten all the national and international media attention, oil companies like Occidental Petroleum (OXY) and Qatar Petroleum have entered almost through the back door, negotiating as quietly as possible a refinery hub in Puerto Armuelles at the frontier with Costa Rica.
Although there is still very little known about the project, studies are on its way and according to calculations it aims to produce up to 350,000 barrels per day. This would allow Panama to become a regional hub for energy distribution, adding one “hub” more to a convenient collection that already includes air travel, cargo and ports. It is worth mentioning that this combination is what have made it possible for companies like Caterpillar, Hewlett Packard, Proctor and Gamble and even ST Aerospace to move their regional headquarters or open their maintenance centers in Panama, investing approximately 1.825 billion US Dollars according to the Ministry for Trade and Industries numbers for 2007 quoted in the last AMCHAM magazine.
According to El Economista, the second phase studies should come out this year and the company is expected to begin operations at the beginnings of 2012.
Puerto Armuelles, as I remember it from short visits five years ago ( or more) is a quiet town, traditionally a banana producer and not really very active in any other aspect. This project will change everything for Puerto. New housing, new industry, new infrastructure. Not bad for a town where public schools are made out of wood and the first computer lab came in only eight years ago. On a global level, the investment alone will surpass the Canal Expansion itself, and with the current energy crisis it will probably mean an incredible advantage for Panama as a country.
In a world where resources are scarce, Panama has unique advantages that allow you to weather the storm easier. Key and diverse geography, short distances within the country. Coast to coast in 2 hours or less if you are flying. Center to frontier in less than 7 hours driving or 1 hour flying. No hurricanes, no natural disasters. Only rain, sun and a 100% humidity half of the year. And, of course, there is Casco Viejo. Nothing like it in the country both as an investment or a home, and still almost half the price as any of its restored regional peers. Add to it the increasing number of international commercial trade treaties, the Canal Expansion and now the oil refineries… where would you rather be?