Nicosia stands firm in Chevron standoff

2346 views
1 min read

Nicosia is sticking to its guns over a dispute in the commercial exploitation of the estimated 4.4 trillion cubic feet of Aphrodite’s untapped natural gas, ahead of the 5 November deadline.

Chevron President Clay Neff was in Cyprus on Friday in a last-minute ditch to salvage the deal, to hold meetings with Cypriot officials and President Nikos Christodoulides.

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

The government insists that Chevron revert to the original plans for exploiting the gas field.

In the summer, Aphrodite’s 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.

Speaking ahead of a meeting with Neff, Energy Minister George Papanastasiou told the Cyprus News Agency that the disagreement over Aphrodite gas “leaves us uncertain”.

Papanastasiou said as the conclusion of the dispute resolution period on the field’s development plan draws to an end, the government insists on “all parties honouring their signatures”.

He was referring to the initial plan submitted by Noble Energy, which included the construction of a Floating Production Unit (FPU) for natural gas production.

Cyprus’ objections to the consortium’s new plans stem from the argument that the FPU would allow for increased gas recovery, consequently maximising revenues.

“The absence of an FPU would endanger Cyprus’ revenues,” argued the minister.

The FPU, as he clarified, purifies the gas from oil derivatives, water, and particles.

“Our projections were that gas would be available in the initial five years of production, but in the subsequent five years, when revenues for the Republic of Cyprus were expected to start flowing in, there would be no gas left,” explained Papanastasiou.

He emphasised that the initial development plan proposed in 2019 was accurate and should be honoured by all parties.

It is understood the company’s motivation is that Chevron is directing capital investments towards Israel’s major fields, Tamar and Leviathan.

“Cyprus had made significant contributions but received little in return. Thus, the government is insisting that all parties uphold their commitments”.

Papanastasiou also highlighted that the Aphrodite field is a low-risk asset, ready for sale, which is why the government emphasises the need for infrastructure development.