Panama is carrying out studies for potential oil exploration, hoping that recently discovered oil fields in neighboring Colombia close to Panama’s border could extend into Panama.

Panama is 100-percent dependent on crude oil and refined oil products imports, although it is home to one of the most crucial shipping lanes in the world, the Panama Canal.

Now energy officials in Panama hope that the oil fields found in Colombia may extend as far as Panama. In addition, a geological survey, the first in 30 years, found signs that there could be oil and gas in Panama’s section of the Caribbean Sea in an area connected with three natural gas wells in Colombia, energy officials said early this year.

ION Geophysical Corporation, for example, has been expanding its data library on Panama, saying last year that recent exploration success offshore Colombia immediately next to Panama’s Caribbean coast spiked the interest of companies in understanding Panama’s geology and potential for oil and gas resources.

Last year in August, the National Energy Secretary of Panama, Víctor Urrutia, said in ION Geophysical Corporation’s press release:

“Hydrocarbon exploration in Panama has identified various sedimentary basins, proving the existence of geological structures that may contain oil and gas, although there hasn’t been a commercially exploitable discovery. Today, through the use of new and more sophisticated techniques, it is possible to identify prospective areas that previously were not considered economically viable, such as deep water deposits and/or those that are geologically more difficult to locate.”

“The initiation of this seismic survey will provide high-value information to help assess Panama’s oil and natural gas prospectivity,” Urrutia said.

Until Panama assesses its oil and gas resources and the potential for their recovery, it will continue to rely on imports.

Last week, the United States and Panama signed a cooperation agreement on energy and infrastructure investment, aiming to further diversify Panama’s sources of energy, broaden Panama’s role as a liquefied natural gas (LNG) hub for Central America and the Caribbean, and integrate natural gas as a source of downstream energy.

By Tsvetana Paraskova for Oilprice.com