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Panama was originally inhabited by tribes dating back thousands of years but, after landings and settlement by Spain from 1502, these were mostly wiped out, primarily by disease. Under Spanish rule from 1538, it became part of the Viceroyalty of Peru.
In 1698 it was the site of the Darien scheme which involved the set-up up of a Scottish colony. The scheme’s failure and ensuing debt led to bail out by England and the union of Scotland in 1707.
Encouraged by the USA, Panama gained independence in 1903, allowing the Panama Canal to be built by the USA who kept sovereignty over a 16 km wide zone. In 1977 the transfer of the canal was agreed to occur in 1999.
From 1970 Panama was ruled as a military dictatorship. It was invaded by the USA in 1989 in an attempt to restore order and democracy. Revenue from canal tolls dominate the economy although commerce, banking and tourism are growing sectors.
Panama has a central spine of mountains that forms the continental divide. This is the eroded volcanic arc at the junction of the Caribbean plate and the Cocos plate beneath the Pacific Ocean. The latter is moving northeast and is being subducted below the Caribbean plate.
The geology of most of the country would appear to be not suitable for the generation and accumulation of commercial volumes of oil and gas. Recent discoveries in neighbouring Colombia open up the possibility of oil and gas potential in the deep waters of the Caribbean Sea along marine Colombia’s border in the northeast.
However, currently Panama has no identified indigenous oil or gas resources, either onshore or offshore.
Globalshift believes it is unlikely to achieve any production in the short or medium term future.
Map and National Flag
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Land area (sq kms)
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Panama is a presidential representative democratic republic. The President is both head of state and head of government, and of a multi-party system.
Executive power is exercised by the government. Legislative power is vested in both the government and the National Assembly, which is elected by proportional representation.
There is no government department specifically responsible for oil and gas resources although the Ministry of Commerce and Industries governs mineral concessions with oil and gas covered by the Secretariat of Energy.
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