Does Panama Have a Stable and Reliable Power and Oil Supply?

The usual marker of a stable country is a stable real estate, power, and oil supply. If you’re moving to Panama, you would also want to make sure it has reliable power and oil supply. Does Panama have it?

Panama’s power supply comes from 8 hydroelectric dams found across the entire country. When it comes to oil supplies, Panama is 100% dependent on crude oil imports from other countries. At the moment, the country is looking at explorations for nearby oil fields and natural gas. Until they find these oil fields, they’re dependent on the Trans-Panama pipeline for their oil supply.

If you’re curious what’s the current energy situation in Panama, we have all the info that you need.

Does Panama Have Stable Oil Supplies?

To understand the power situation in Panama, we first need to understand how their oil situation works. Panama has a very unique situation because of its geographical position and natural resources. From there, we can try to understand their power situation deeper.

Panama is not a producer of any crude oil products, natural gas, or even coal. The country’s geographical position makes it hard to have any oil products. Most of its natural resources are both marine and forestry, which makes it hard to become an oil producer.

So, how does Panama support its oil consumption within the country? The nation relies on its oil imports to provide for its consumers. Most of this oil comes from imports from the United States in the form of refined petroleum. As much as 64 million barrels of refined petroleum products came to Panama’s borders in 2014.

While Panama doesn’t have oil by itself, it handles most of the trade between the Atlantic and the Pacific. The US, for example, uses the Panama Canal to connect with its Asian trade partners. This movement allows for oil products to the other side. Panama even expanded the Panama Canal in 2016 to allow the transit of larger vessels.

Because the country serves as an energy transit point, some economic watchdogs list Panama as an oil exporter. Panama lists its top exports and their value being:

  • Refined Petroleum ($633 M)
  • Coal Tar Oil ($304 M)
  • Petroleum Gas ($147 M)

Even if Panama has a $3.06 B export value, its importation value goes as much as $24.8 B. Its top imports include $5.42 B of Refined Petroleum and $2.75 B of Crude Petroleum.

Another way Panama works with oil is the Trans-Panama pipeline. This oil pipeline spans Panama near their Costa Rican border. Specifically, it is in Chiriqui Grande in Bocas Del Toro along the Caribbean coast. It stretches as far as Charco Azul on Panama’s Pacific side.

The Trans-Panama pipeline carries crude oil from the Pacific to the Atlantic, opened in 1982. During its early years, it transferred millions of barrels of oil from supertankers coming from Alaska. By modern times, most of the oil transfer now goes at a reverse flow. With the growth of Atlantic oil, the pipe started moving its supplies to Pacific Rim refineries.

In recent years, Panama started explorations into potential oil fields in its lands. Colombia had success in finding new oil fields on its offshore territories. Ecopetrol Colombia discovered three oil fields near the border of the two countries.

Due to this, Panama started exploratory studies looking to see if the fields extend to their borders. Three oil fields represent as much as $25 Billion for Colombia, which is a big boost if Panama finds something similar. Panama is also looking to drill for oil in Darien as there is evidence of its existence.

Does Panama Have A Stable Power Supply?

Now that we understand Panama’s oil stability, let’s take a look at Panama’s power stability. When it comes to power generation, most of Panama relies on its hydroelectric power plants.

54% of the electricity needs of the isthmus comes from Panama’s hydroelectric plants. Oil-fired power plants make up 37% of the country’s electrical generation. The remaining 7% comes from coal-based power plants in the isthmus.

Panama is also delving slowly into solar power because of its electrical generation potential. Since 2014, Panama has looked into alternative sources for its thermal power plants. As the country is pushing for harder lines of conservation, solar is fast becoming a viable option. Other renewables like wind are also creating a mark in Panama’s energy landscape.

Hydroelectric Power Generation In Panama

Panama, at the moment, has 8 hydroelectric power plants. Out of 8 power plants, seven of them are operational while one is under construction. Their hydroelectric power plants include:

  • Fortuna Dam
  • Changuinola Dam
  • Baitun Dam
  • Bajo de Mina Dam
  • Madden Dam
  • Bonyic Dam
  • Barro Blanco Dam
  • Gatun Dam

Fortuna Dam operates in Chiriqui and can generate as much as 300 MW of electricity. This dam generates the most power of all the hydroelectric dams of Panama, running since 1984. The three newest dams of Panama are the Changuinola, Baitun, and Bajo De Mina. These three finished in 2011 and 2012, able to generate 364 MW among themselves.

The oldest hydroelectric plant in Panama is the Gatun Dam, created in 1913. This plant impounds the entirety of Lake Gatun, which is an artificial lake from the Chagres River. It can only generate as much as 6 MW. The Madden Dam, able to generate 36 MW of electricity, works as a better reservoir.

In the future, there is an expectation that Panama’s hydroelectric plants will have a drop in contribution. Panama built a more diverse portfolio of energy generation over the past few years. Hydroelectric will only contribute around 18% of the country’s power generation.

Solar Power Generation In Panama

The Sarigua Power Park is Panama’s first utility-scale solar plant, costing around $10 M. Sarigua can generate as much as 300 MW of power, representing 23% of the registered capacity in Panama.

Sarigua Power Park started in 2014 in the Herrera Province, 9 miles (15 km) away from Chitre. The location is near the Sarigua National Park, an area known as a dry desert area. Because of the dryness of the area, it allows for the most amount of sunlight without any problems.

The Sarigua plant itself has 11,886 panels in its location and provides local employment. The people of Parita handle the maintenance of the area, together with the conservation of the park.

Panama is looking towards an expansion of its solar capabilities over the next few years. Research from the National Renewable Energy Laboratory notes Panama has strong solar power potential. Because of its tropical landscape with clear weather most of the year, Panama can generate more power. Its potential should be around 185.2 Million MWh per year – as much as 33 times of Panama’s total consumption.

Panama and Its Trans-National Cooperation For Energy Sustainability

Even with all these power sources, Panama is unable to meet all the electricity demands of the country. To get more power generated, the collaborated with their neighboring countries. Panama became a member of the Sistema de Interconexión Eléctrica de Los Países de América Central (SIEPAC). Member countries of the collaboration include:

  • Panama
  • Guatemala
  • Costa Rica
  • El Salvador
  • Honduras
  • Nicaragua

The SIEPAC member countries share power across transmission lines as long as 1,118 miles (1800 km). This transmission line generates as much as 300 MW, connecting electricity grids across the nations.

With SIEPAC, the intention is to provide safe, consistent, and stable power across borders. They are also aiming to use more renewable power options, together with deeper electricity trade. The transmission line is under the management of an independent system operator that works trans-nationally.

In 2018, Panama also started the development of a 381-mile (614 km) shared power line. This time, the connection is between Panama and neighboring Colombia. The entire project is the Panama-Colombia interconnection line, looking at an electrical generation of at least 300 MW.

The power connection will consist of a line that will connect the Panama II substation in Pedregal. This substation will connect with the Cerromatoso substation in Colombia. It will also feature an underwater electrical cable connection. As much as 25 miles (40 km) out of 35 miles (55 km) will be in Panama’s territorial waters.

The entire project is under the purview of the company ICP. This company is a joint venture of Empresa de Transmisión Eléctrica, S.A. (Etesa) and the Colombian company Interconexión Eléctrica, S.A. (ISA).


Does Panama have a stable and reliable power and oil supply? The short answer is yes, Panama created a situation where their power and oil supply is more stable than most countries in the region. The long answer is, as long as Panama continues its international cooperation, it is likely to stay stable for a while.

If you’re looking at investing in Panama’s ever-growing power and oil sector, do it soon. If you’re moving to the isthmus concerned about your future in the locale, this is good news. A country with a stable oil and power supply means it is doing a good job serving its people.

So, are you moving to Panama? Are you looking at Panama’s power and oil sector? With its growing focus on making itself energy independent, this is the best time for the country. With its improving economy, Panama is the country for you.

Matt Romero

I’m Matthew Romero, one of the guys behind I am incredibly passionate about Panama, its beautiful territory, and all the incredible opportunities which offer to people coming here from all over the world both either visiting and settling. In this blog, I decided to share my passion with you!

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