Ministry Authorized to Negotiate E&P Contract with HKN

Panama's cabinet has authorized the trade and industry ministry to negotiate and sign a hydrocarbons E&P contract with US oil and gas company HKN (Amex: HKN), formerly known as Harken Energy.

The contract is for E&P in the San Miguel gulf, the ministry said in a statement.

HKN operates in Panama through its interest in London-based Global Energy Development, which signed a technical evaluation agreement with the ministry in 2001 for three onshore and offshore blocks, including the Garachine block area, according to Global's website. Garachine's potential resources are 18.7Mboe, Global said in a recent presentation.

HKN would pledge to invest more than US$10mn on exploration in the first five years of the contact.

There is no hydrocarbons production in the country and the Harken deal is the closest to materializing, a ministry hydrocarbons department official told BNamericas previously.

Irish firm Circle Oil is carrying out the only other hydrocarbons E&P-related work in Panama.

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