Cypriot Government, Chevron Reach Agreement for Aphrodite Gas Field
The government of Cyprus and Chevron have reached an agreement for the development of the ‘Aphrodite’ gas field in block 12 of the country’s exclusive economic zone (EEZ).
The negotiations between the two parties have been ongoing for several months, with the government initially rejecting proposed amendments from the company. However, with the deadline proposed by the energy ministry, an agreement has now been reached.
According to the energy ministry, the two parties will now intensify discussions based on the agreed development and production plan for the mutually beneficial exploitation of natural gas reserves in ‘Aphrodite’. While the details of the agreement have not been made public, it has been reported that the government’s push for a floating production unit (FPU) has been accepted by the company.
Energy Minister George Papanastasiou has stated that this is a win-win situation and that the final decisions for exploiting the gas in ‘Aphrodite’ will be made in the coming days or weeks. The goal is to have natural gas from the field by the end of 2027. The political party Depa has also welcomed the agreement, stating that it paves the way for Cyprus to acquire its own energy infrastructure.
Earlier this week, Papanastasiou expressed optimism that a deal could be reached in the negotiations. He also clarified that the exchange of letters between the two parties was only a part of the process and that several deliberations were taking place to reach a mutually acceptable solution.
In May, the joint venture submitted a revised development plan for the gas field, which was rejected by the Cypriot government in August. The negotiation period was extended twice, with the latest deadline being November 5. The main point of contention between the government and the company was the construction of the FPU, with Chevron proposing to scrap it from the plans and connect the field to liquefaction infrastructure in Egypt via a subsea pipeline.
However, the government argued that the presence of an FPU would extend the life cycle of the field and optimize production, leading to higher revenue for Cyprus. The joint venture also proposed building three production wells instead of five, as stipulated in the development plan agreed to in 2019.
The ‘Aphrodite’ gas field was discovered in 2011 and is estimated to hold 4.5 trillion cubic feet of recoverable gas. Chevron is the operator and a 35% partner in the field, along with Shell (35%) and Israeli firm NewMed Energy (30%). With this agreement, it is hoped that the country will soon be able to benefit from its natural gas reserves and boost its economy.
