Chevron official in Cyprus as Aphrodite deadline looms

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Clay Neff, Chevron’s president for Africa and Latin America Exploration and Production, will visit Cyprus on Friday, days before the expiration of the government deadline for negotiations over the revised development plan of the Aphrodite gas field.

The dispute revolves around commercially exploiting the estimated 4.4 trillion cubic feet of Aphrodite’s untapped natural gas.

Sources told CNA that Neff will meet President Nikos Christodoulides and Energy Minister George Papanastasiou.

It is understood the energy giant’s high-ranking official will request a new extension to the consultation period, which expires on November 5, to find a solution to the deadlock.

The Aphrodite consortium of Chevron, Shell and Israel’s Newmed Energy submitted a revised development plan which features significant cost-cutting adjustments compared with the initial one submitted in 2019 by Noble Energy, the then-operator of the field.

The Cypriot government rejected the plan in late August, allowing for 30 days of consultations to settle the dispute. The period was extended for an additional 30 days and expires on Sunday.

FPU core of disagreement

According to well-informed sources, the cancellation of a floating production unit (FPU) is at the core of the disagreement with the consortium now proposing the gas will enter a 480-kilometre pipeline bound for the Idku LNG terminal in Egypt.

Moreover, the new plan features three production wells instead of the previous five, believed to result in reduced gas production.

Estimates suggest the new revised development plan features significant cost reduction for the consortium, mainly driven by the removal of the FPU.

The capital expenditure of the 2019 plan was estimated at $3.6 billion.

The government believes the FPU would extend the reservoir’s lifespan, optimising gas production.

In contrast, its removal would signify reduced gas recovery and consequently reduced revenues, while such infrastructure would provide flexibility in the operation of the reservoir.

As the deadline over settling the dispute with Chevron is rapidly approaching, Papanastsaiou said Tuesday that Cyprus believes that energy autonomy is obtained not only with reserves but also with gas infrastructure.

“This is our goal, which is why we insist on infrastructure,” he said.