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Puerto Armuelles, Chiriqui, Panama is a 25,000 person town on the Pacific Ocean near Panama’s border with Costa Rica. Because of the nearby deep water port of Charco Azul, Puerto Armuelles has been a crude oil transfer site since the 1970’s. At first crude oil from Alaska was transferred from super tankers to Panamamax tankers and later a pipeline was built across Panama from Puerto Armuelles to Bocas del Toro Province on the Caribbean. From Panama the oil moves to refineries on the United States’ Gulf Coast. A possible upcoming megaproject for Panama is an oil refinery at Puerto Armuelles.

Panama

Panama is the narrowest part of the Americas and thus is the site of the Panama Canal connecting Atlantic and Pacific. This tropical paradise is in the midst of an economic boom related to foreign investment in Panama, the discovery of Panama by North American retirees, and Latin America’s steadily increasing prosperity.

Crude Oil and Panama

When oil started coming down the Alaska pipeline in the 1970’s it was shipped by super tanker down to Panama. Since the super tankers are too large to pass through the Panama Canal the oil was transferred to “Panamax” tankers. Panamax refers to the largest size ship that can fit in the locks of the Panama Canal. Because of the deep water port at Charco Azul near Puerto Armuellas this area was picked for the transfer point. In 1982 an oil pipeline was completed that goes from Puerto Armuellas to Bocas del Toro on the Caribbean from where the oil is shipped to US Gulf Coast refineries.

A new aspect of Panama and oil is the possibility of a megaproject to rival the Panama Canal Expansion. Occidental Petroleum and Qatar Petroleum are planning to invest $9 Billion (US) to build a refinery at Puerto Armuellas. According to La Prensa, Panama, September 27, 2008 the project in under a four year long government study of environmental safety and economic feasibility. When completed the refinery would be capable of processing 350,000 barrels of crude oil per day.

The Puerto Armuellas area used to be the home of Chiquita Bananas’ Panama operations. After Chiquita left Panama and with the infection of and loss of much of Panama’s banana production there has been are high unemployment rate around Puerto Armuellas. Thus local politicians are advocating very strongly for the refinery project.

If this project get the go ahead it will be a larger project than the Panama Canal Expansion. In addition a refinery at Puerto Armuellas will probably create more long term jobs and local economic benefit than the canal expansion.

Crude Oil, Pipelines, Refineries and Investment in Panama

Panama is in the midst of a construction boom, primarily in and around Panama City. There appears to be lots of money being made and lots to spend in the capital city. Panama’s rate of foreign investment per capita is the highest in Latin America. Now more of that investment prosperity in Panama is slated to move up to Chiriqui Province.

Like any long term economic stimulus the foreign investment in and local wages from work at an oil refinery will pass though Panama’s economy several times. Much is made of the wave of North Americans buying real estate in Panama. We believe that the underlying prosperity generated by investment in successful Panama business ventures is what drives and will drive Panama’s economy and prosperity for years to come.

If you are interested in investing in Panama or would like to know more about commercial real estate in Panama come to see us at ABPanama. We deal is commercial as well as residential property and have over 23 years experience managing real estate portfolios.