Costa Rica puts blocks out for auction

Jan 17, 1997 01:00 AM

Costa Rica plans to restart oil exploration by national and foreign companies that was suspended in 1988. "It has to do with a process that has been underway since the application of the new May 1994 hydrocarbon law," Environment and Energy minister Rene Castro told. He said the explorations will take place through an auction process, that will begin later this month and grant 15 to 48 exploration blocks, each about 200,000 hectares. The small Central American nation was divided into blocks for exploration by the National Hydrocarbon Council, a new body formed by national experts and ministry officials. Explorations within the different blocks could cost about $10 million, or $480 million for the entire country, he said. "It's an impossible sum for the state of Costa Rica, and thus the necessity to open the exploration process to private initiative," Castro said. Petroleum exploration in Costa Rica began in 1915 with the participation of US company National Oil. Most recent explorations took place between 1987 and 1988 by Petro Canada. In none of the explorations has a significant quantity of commercial oil ever been discovered. The Costa Rican government intends to auction exploration in the Caribbean marine areas, eight regions near the cities of San Carlos and Limon and along the Nicaragua border in the north. Also open for exploration are the zones near the city of Nicoya, north of the Guanacaste province, and in the Puntarenas province. Castro said US and Canadian companies have expressed their interest in searching for petroleum reserves in the country. Costa Rica's consumption per month is 1 mmbpd, usually supplied by fellow Latin American nations Mexico and Venezuela. The hope is that there are several medium-size wells, which could produce between 25 and 30 million barrels of crude in its lifetime. Costa Rica law allows petroleum exploration concessions to be extended for a period of three year, renewable for the same time period. If production exceeds 1,000 barrels per day, the country must receive 15 %, according to Costa Rican law.

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