Region’s Presidents Discuss Unification

April 13, 2007

During a trip to Campeche,Mexico, this week, President Oscar Arias reiterated his interest in making Costa Rica the site of a Central American-Mexican oil refinery, as well as moving ahead with the huge and controversial Boruca dam project in southern Costa Rica.

The purpose of the trip: joining other leaders from the region at the Plan Puebla-Panama (PPP) Summit for Heads of State. At Tuesday’s meeting, the assembled Presidents pledged, once again, to move ahead with the six-year-old proposal to develop continuous infrastructure between southern Mexico, Central America and Colombia in the areas of disaster prevention, telecommunications, trade, tourism and roadway integration. A regional oil refinery is part of the more than $8 billion plan, proposed by Mexico in 2001.

In a joint declaration, summit participants created two advisory councils, the Council of Social Development and the Council of Economic and Production Development, to oversee the agenda, and prioritized six work areas: Energy, Trade and Competitiveness, Telecommunications, Transport and Tourism, according to a statement from Casa Presidencial.

President Felipe Calderón of Mexico, Oscar Berger of Guatemala, Manuel Zelaya of Honduras, Tony Saca of El Salvador, Martín Torrijos of Panama, and Alvaro Uribe of Colombia – as well as Belizean Prime Minister Said Musa, the president pro-temps of the PPP system, and Nicaraguan Vice-President Jaime Morales – participated in the summit.

Last year, Calderón visited Costa Rica and told reporters the plan needed to be reevaluated (TT, Oct. 6, 2006), a step that got under way during a planning meeting in San José later that month to evaluate plans for financing the project. Participants in that meeting also ratified Colombia as a PPP member (TT, Nov. 3, 2006).

Calderón said this week that though member countries have already raised more than $4.5 billion in investments to execute the plan, they’re just over halfway to their goal – since 2001, member countries have agreed upon so many initiatives and projects as part of the plan that the total cost will be $8.05 billion.

The regional refinery remains a cornerstone of the plan. Calderón reiterated at the summit Mexico’s commitment to supply petroleum to the refinery, to be installed and maintained in a Central American country with help from private investors, with the goal of supplying the region’s petroleum needs, the statement said.

The Mexican President said during his October visit to Costa Rica that this country and Panama are the front-runners to become the refinery site – a possibility Arias has been lobbying for. However, the Costa Rican President said after the summit that he is disappointed by Calderón’s announcement that Mexico will supply the proposed refinery with 80,000 barrels of crude oil per day, rather than the 240,000 barrels per day it had originally promised.

“If from 240,000, which was Mexico’s commitment in the past, it’s reduced to 80,000, one-third, I don’t see that this is a reason for great happiness and satisfaction,” Arias told the daily La Nación on his way to the Campeche airport.He said the reduction could affect multinational companies’ interest in operating the refinery because “it will oblige (the company) to seek other supply sources, since we had always talked about a refinery of 365,000 barrels per day to make the project viable.”

Calderón explained that the public contracting process to build the refinery will begin in November, and that the private investors involved will decide where the refinery will be located.

Salvadoran President Saca said Central American leaders should pursue oil drilling options to help reduce the region’s dependence on foreign oil sources, while Colombia’s Uribe said his country may be able to help supply the refinery as well if it can recover its reserves.

Arias said that aside from the refinery, he is particularly interested in the aspects of the Plan Puebla-Panama that deal with the integration of electrical infrastructure, because Costa Rica has great potential to produce hydroelectric energy. He promised to promote the proposed Boruca Hydroelectric Project, which has been under consideration for decades and drawn criticism because of its potential effect on the ecosystems and indigenous territories of the area (TT, May 26, 2006), during the rest of his term.

“We have great potential there,” he said. “We want to develop Boruca, a project that’s been under way for many years, and I’m going to push it a great deal during these three years I have left (as President).”

Costa Rican Foreign Minister Bruno Stagno, Presidency Vice-Minister José Torres and Ambassador to Mexico Gioconda Ubeda accompanied Arias on his two-day trip. He returned to Costa Rica Tuesday evening.

 

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