Setting up a new refinery in Panama Research Paper

Setting up a new refinery in Panama - Research Paper Example A production plant processes the feedstock of a refinery. A depot, tank farm, is usually located near or at a petroleum refinery and it stores bulk of liquid products. A refinery is considered as a vital part of the downstream end of the petroleum industry. There are very important and major roles played by refineries in development of countries, regions and the world as a whole. Professionals in this field are cognizant of the reality that natural resources are scarce, the importance and desire for practices that are sustainable. They also reckon the need for social fairness in the use of these limited resources. They are therefore tasked with the leading role in designing, planning, building and securing a sustainable future. Refineries act as link between natural resources and the consumer. In their capacity, oil planners must continuously take part in multidisciplinary teams often with other professionals, such as economists, sociologists, and ecologists to address the issues and challenges of sustainable natural resource development. They should therefore advocate economic principles that recognize our environment and natural resources as capital assets. The largest chunk of Panama’s trade transactions take place in the Colon Free Trade zone, the biggest free trade zoned in the world. From the estimates of the Colon Zone Management, this trade region has accounted for 92% of Panama’s exports and 64% imports in during 2007. In 1982, Panama entered into a Bilateral Investment Treaty with the United States. This agreement has been put in place to protect the United States private investment in Panama and also help it in developing its economy. In addition, Panama and the US signed an FTA agreement in 2007 and are under implementation. The United States is by far the principal trade partner of Panama. It accounts for about a third of Panama’s imports and exports. Panama’s major trade partners according to CIA reports for 2009 are as follows: Exports Imports United States 39.2% United States 29.6% Netherlands 10.7% Costa Rica 5% Costa Rica 5.8% China 5% Sweden 5.4% Japan 4.2% The main exports from Panama are; B ananas, Coffee, Shrimp, Sugar and Clothing. The nation is highly dependent of consumer and capital goods. The trade situation has improved significantly owing to the endeavor to expand the Panama Canal that has been under construction since 2007. The project is estimated to be $5.3 billion and is expected to continue the revamping on the trade sector. The number one agricultural export- predominantly controlled by foreigners is bananas. It is followed by shrimp. Panama experienced a decline in exports of about 11% from 1997 to 1998. This was caused by quotas imposed by the EU on banana exports and that banana exports contribute a fifth of all exports. The Free Trade Zone has increased the light industry exports, manufacturing and clothing textiles. On the other hand, Panama has experienced competition from Mexico starting 1996 and has experienced stunted growth since 1998 due to protective tariffs imposed on the country. COUNTRY EXPORTS IMPORTS BALANCE United States 354 1,117 -763 S weden 62 25 37 Costa Rica 41 119 -78 Mexico 24 133 -109 Guatemala 21 62 -41 Spain 13 61 -48 Japan 12 186 -174 Colombia 9 116 -107 Ecuador 4 243 -239 Venezuela 4 222 -218 Foreign firm investment in Panama A foreign firm seeking investment in a large firm would be at an advantage