While renegotiations are carried out on a loan to build an oil refinery, President Solis has issued a decree extending the moratorium on oil exploration and production until 2021.
While the private sector mourns the loss of competitiveness caused by the high cost of electricity and the lack of proposals to solve the power supply problem affecting the country, the government has decided to extend for six years a ban on all types of oil industry in the country, citing lack of information on the effects of the activity on the environment.
The Chinchilla administration is insisting on building a refinery, this time using the method of an international tender.
The new concept aims to "dilute the Chinese accent from the controversial project ", after the Comptroller General of the Republic (CGR) slowed down the project upon discovering that there were conflicts of interest in the feasibility report for the refinery.
The feasibility study for the project was undertaken by a subsidiary of the Chinese company which is a partner in the project, a situation that is prohibited under the contract with the Costa Rican state refiner.
The Comptroller General of the Republic of Costa Rica also found "weaknesses in the feasibility study," and ordered the Board of the Costa Rican Oil Refinery Company (Recope) to refrain from using the feasibility study conducted by the Chinese company HQCEC "and any others that rely on this", which in practice means stopping the project of building a refinery at a cost of about $1.5 billion.
The $1.5 billion oil refinery project in Costa Rica has been severely questioned and has not yet had its economic feasibility demonstrated.
Costa Rican economists and politicians have questioned the project believing that the money would be better spent in finding alternative forms of energy.
On the other hand, there are still not any final costs for the project, or the price of the lease of the plant to the Costa Rican state run company RECOPE, leaving its economic viability still in doubt.
Will the fuel be included in the state fuel monopoly run by the Costa Rican Oil Refinery?
While all around the world the importance of natural gas as an energy source is growing, the Costa Rica state agency Costa Rican Oil Refinery (RECOPE), which holds a monopoly on crude oil and its derivatives, is preparing its infrastructure for the self-imposed role of sole importer and wholesale distributor of the fuel.
The Supreme Court has admitted an appeal against a government decree that prevented oil exploitation concessions for 3 years; Mallon Oil may be able to force the government to sign the contract.
The Sala IV, Costa Rica’s Supreme Court, suspended president Laura Chinchilla’s decree, which prevented the exploitation of hydrocarbons and the granting of permits for three years, until a constitutional complaint made by the Association of Geologists is resolved.
The Constitutional Court has dismissed an appeal brought by the oil company Mallon Oil which requested its contract for oil and gas exploration be signed.
In its ruling, the Constitutional Court informed Mallon Oil that the process they must follow is to make its request via a contentious trial.
"Meanwhile, the National Environmental Technical Secretariat (SETENA) dismissed the appeal for reversal that Mallon Oil filed last July against a resolution asking them to specify in which sites they would initiate the exploration and exploitation of hydrocarbons ", reported Nacion.com.
Mallon Oil Company has filed an appeal in an attempt to get a contract signed for the exploitation of oil and natural gas.
In the appeal to the Constitutional Court, the company is demanding that the Ministry of Environment, Energy and Telecommunications (Minaet) sign the contract for oil and natural gas exploitation in the south, having one a concession for it in a competitive tender eleven years ago.
The regulator is analysing the final details for the signing of an oil concession in the north of the country to Mallon Oil Company.
Teofilo de la Torre, the Minister for Environment and Energy, said the company over the past ten years has complied with legal procedures and various appeals, in order to get the award, and now the state must respect their commitment.
Oscar Arias announced his opposition to petroleum exploration in Costa Rica in front of Congress.
The president insisted that Costa Rica has encouraged investment in alternative and renewable energy sources, and the country will maintain its commitment not to allow petroleum exploration.
In his article in Nacion.com, Esteban A. Mata highlighted the contradiction in President Arias’ position, noting that "the former Minister of the Environment, Energy and Telecommunications (Minaet), Roberto Dobles, had pointed to the country’s need to explore these resources with China in January 2008."