Chevron still keen on developing Aphrodite

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Chevron and Noble Energy reaffirmed the importance they attach to developing Cyprus’ Aphrodite natural gas field as part of their strategic energy plans in the Eastern Mediterranean.

This was the message given to President Nicos Anastasiades after a teleconference with Michael Wirth, the CEO of Chevron, Noble Energy CEO David Stover and officials of the two companies.

US energy giant Chevron is taking over Noble Energy for $5 bln in an all-share deal which is expected to be completed in October.

Chevron now has a major stake in the operating licence for Aphrodite in the Exclusive Economic Zone of Cyprus, along with joint venture partners Shell and Israel’s Delek.

Cyprus government spokesman Kyriakos Koushos said in a written statement that the companies reaffirmed during the teleconference that development of Aphrodite gas was part of their plans.

“They assured of their intention to proceed the soonest possible with their plans on how to exploit the gas field despite the relevant delay due to the coronavirus pandemic and will visit Cyprus as soon as conditions allow,” the statement said.

President Anastasiades expressed his satisfaction with the commitment shown and said the government was ready to cooperate with the companies and offer every possible help to achieve common goals.

Cyprus Energy Minister Natasa Pilides also participated in Monday’s teleconference.

A joint announcement by the American companies in July said: “The acquisition of Noble Energy provides Chevron with low-cost, proved reserves and attractive undeveloped resources that will enhance an already advantaged upstream portfolio.

Noble Energy brings low-capital, cash-generating offshore assets in Israel, strengthening Chevron’s position in the Eastern Mediterranean.”

Former Energy Minister, Georgios Lakkotrypis, at the helm of Cyprus’ energy efforts for seven years, tweeted at the time “a very important development which could have significant implications in the Cyprus exclusive economic zone (EEZ) and the East Med.”

Veteran energy commentator Charles Ellinas said, “Chevron bought Noble Energy mostly because of its shale assets in the US.”

“But more recently it acquired blocks offshore Egypt, in the Red Sea and the Mediterranean, having previously confirmed interest in the region.

It remains to be seen what it does with Aphrodite,” he told the Financial Mirror in July.

Ellinas, the CEO of e-CNHC (ECP Natural Hydrocarbons Company), argued: “Chevron is doing better than most other majors, but it is very disciplined when it comes to investments.”

“The key to Chevron’s strategy is to maintain dividend growth. So, it is investing in projects with high returns.

In the current oversupplied gas markets and low-price environment, it may take its time before it decides what to do with Aphrodite.

But certainly, it is financially strong and can invest where it fits its plans.”

Noble was the first operator to discover natural gas resources offshore Cyprus in the Levant Basin.

In November 2019, the company received the first exploitation license granted by Cyprus, providing a fiscal and regulatory pathway for the economic development of the Aphrodite field.

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 extracted.