ENERGY: Cyprus to renegotiate with Aphrodite gas field consortium

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Nicosia will renegotiation the contract with the consortium that holds the license to exploit Aphrodite gas field in block 12 of Cyprus Exclusive Economic Zone.


Energy Minister George Lakkotrypis told reporters after that the best choice is to find a mutually acceptable solution to move on with the development of Aphrodite as soon as possible – after several years of delay. 

The consortium made up of Texas-based Noble Energy, Israel's Delek and Royal Dutch Shell wants to renegotiate the contract on the Aphrodite gas field due to low oil prices.

At the end of December 2017, the consortium informed the government that it had reached a preliminary agreement with Egypt’s LNG plant to sell natural gas to Shell that runs the facility.

“They informed us that due to the reduced oil prices internationally, the project was not financially viable, and they asked for the economic terms of the contract to be revised,” said Lakkotrypis.

“We concluded that the best choice is to try to find a mutually acceptable solution with the consortium in order to move on with the development of Aphrodite as soon as possible,” he added.

The Cabinet appointed a negotiating team that would enter a dialogue with the companies.

The negotiating team consists of the Energy Minister, the Minister of Finance, the Energy Minister’s advisers, the Cyprus Hydrocarbons Company, and the state Law Office.

Lakkotrypis said the Government would like the negotiations to be concluded as soon as possible.

Cyprus aims for natural gas to start flowing to Egypt’s LNG facility in 2022, therefore generating its first revenue from natural gas in the same year.

But as time passes that date is shifting further downstream.

Texas-based Noble Energy in 2011 made the first discovery off Cyprus in the Aphrodite block estimated to contain around 4.5 trillion cubic feet of gas – it has yet to be commercialised.

Cyprus has also issued exploration licenses to Italy’s ENI, America's ExxonMobil and France’s Total.

The discovery of nearby Egypt’s huge Zohr offshore reservoir in 2015 has stoked interest that Cypriot waters hold the same riches.