Costa Rica Coffee Guide

Costa Rica government to search for gas, oil in north

June 6, 2011

Costa Rica’s Ministry of the Environment, Energy and Telecommunications (MINAET) are in the last stages of signing an agreement with the U.S-based Mallon Oil Company to start the search for oil and gas reserves in several parts of the country, according to a report published Monday by the daily La Nación.

The government will grant the Mallon Oil with a 20-year concession in the cities of San Carlos and Sarapiquí (both in north-central Costa Rica) and Pococí, on the northern Caribbean coast.

The company plans to extract five to 25 million oil barrels annually, enough to supply the local demand, which is currently estimated at 19 million barrels per year, La Nación reports.

The revenue from the oil is estimated to be at least $7 billion for the entire length of the concession.

Mallon Oil Company has spent the last decade trying to obtain the required permits to start the oil exploration. It first started business in the country in 2000. Back then, former president Miguel Angel Rodriguez (1998-2002) authorized the company to start oil explorations after winning a public bidding.

However, a series of appeals filed by the Justice for Nature organization kept the firm from signing the contract for 10 years.

In addition, an oil ban issued during the Abel Pacheco government (2002-2006) froze the project for four years. Pacheco felt petroleum exploration was too harmful to the environment.

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