President prefers gas over oil as U.S. firm seeks OK

A U.S. oil exploration company has survived 10 years of legal challenges against its concession, and now the government wants to become its partner.

The firm, Mallon Oil Co., received rights to drill for oil and gas in 2000, but environmentalists immediately challenged the projects in Costa Rica’s northern zone.

A constitutional court decision seems to have opened the way for the private company to seek a signed agreement with the government. But President Laura Chinchilla seems to be balking.

Casa Presidencial said Tuesday that the president had reaffirmed her pledge to push for renewable energy. Mallon won the right to explore through a bidding process under the existing general law for petroleum in March 2000.

Casa Presidencial said that the contract was being reviewed with an eye toward eventually signing it.

Casa Presidencial said that the review had as its object the evaluating of the legal aspects as well as the satisfaction of the public interest and to guarantee respect for the protection of the environment.

The review, Casa Presidencial said, will study the option of limiting the process only for the exploration and eventual exploitation of natural gas instead of petroleum and will analyze the possibility of a public-private alliance with
state institutions such as the Instituto Costarricense de Electricidad and the Refinadora Costarricense de Petróleo, S.A.

Neither state institution has shown any inclination to search for petroleum in the past even though Costa Rica may be sitting on large reserves.

Efforts by another U.S. firm to do exploratory drilling off the Caribbean coast were halted by environmental protests lead by the organization Oil Watch.

Now the country imports all its petroleum via Refinadora Costarricense. Shortly plus gasoline will be selling for $5.45 a gallon and super for $5.55, based on increases that were announced Friday.

The political party with a single representative in the legislature, Frente Amplio, said in a release that Costa Rica ought to be a country free of petroleum exploration and exploitation. It called on allied organizations also to protest the measure. The representative, José María Villalta, said that the legislature should speed up approval of a measure to bar exploration in Costa Rica.

He correctly noted that the 20-year agreement would cover tracts in San Carlos, Sarapiquí y Pococí.

The Partido Acción Ciudadana also has announced its opposition. Both parties opposed the free trade treaty with the United States and efforts by a Canadian firm to install an open pit gold mine in northern Costa Rica.

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