The long-awaited offshore gas boom of Cyprus seems to be hitting a brick wall, if US major Chevron is pulling out. In a last ditch attempt, the US major is assessing its options in the Cypriot Aphrodite saga. Clay Neff, Chevron’s director Exploration and Production Middle East, should have been meeting Cypriot president Nicos Christodoulides and George Papanastasiou, minister of energy. Until now Neff reiterated to the press that he is optimistic something could be arranged although the government had held up the agreement. It seems that Cyprus is still holding on to its perceived interests but understands that Chevron currently wants to cut the costs of the overall project. At present, the US major is operator and, with Shell each have a 35% stake while the Israeli firm New Med Energy has a 20% share.
The current discussions are mainly focused on a new updated Aphrodite development plan to Cyprus, entailing connecting the gas field’s production to liquefaction infrastructure in Egypt, through a subsea pipeline. The proposal has been rejected by Cyprus in August, while the overall contract having a 30-day negotiation window to reach a resolution, which now has been extended again to a November 5 deadline. According to Cypriot media sources the rejection by the government is linked to the JV’s cancellation of a plan included in the original 2019 development plan to build a floating production unit (FPU) to process the gas before it’s sent to an Egyptian terminal. In the update proposal the JV partners also have stated that the production wells will have to be reduced from five (5) to three (3) well, which would directly mean a lower production. The reason for the latter change in production is to cut costs by 1 billion euros ($1.07 billion) for the revision over the 3.4 billion euro ($3.63 billion) 2019 plan.
On November 5 Cypriot minister of energy has stated to the press that the government will respond to a request from Chevron to extend a deliberation period for the ‘Aphrodite’ gas field in the exclusive economic zone (EEZ) within the day. The outcome is not yet known.
The Aphrodite natural gas field, located in Block 12 of the exclusive economic zone of Cyprus, 160 km south of Limassol, and 30 km northwest of the Leviathan field, is in an area where sea depth is 1,700 meters. Aphrodite was discovered by the A-1 well in September 2011. The A-2 appraisal well, drilled in 2013, confirmed approximately 98 BCM of contingent resource with a potential for an additional 26 BCM of prospective resources.