Govt, Harken Wrapping Up E&P Contract Talks

Panama and US oil and gas company Harken Energy (Amex: HEC) are in the "final stage" of contract talks to carry out exploratory drilling in Darien province, a hydrocarbons department official from Panama's trade and industries ministry told BNamericas.

There are two or three points that have to be resolved, said the official, adding Harken will have six months to begin exploratory work once the contract is signed.

Harken 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, according to Harken's and Global's websites. The blocks cover 1.4mn acres (5,666 sq km).

Panama's comptroller general must ratify the contract signing, the official said.

There is no hydrocarbons production in the country and the Harken deal is the closest to materializing.


Meanwhile, Irish firm Circle Oil, which is carrying out the only other hydrocarbons E&P-related work in Panama, has requested an extension to the prospecting permit the ministry granted in 2005, the official said.

"We currently are reviewing the request," said the official.

Circle's permit is for offshore block A that covers some 3mn acres and lies in water depths ranging from 500-3,000m.

The Irish firm last year signed a JV agreement with Australia's Montage Petroleum to explore the block.

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