Cyprus and Chevron discuss speeding up Aphrodite exploitation

Talks between the government and US energy giant Chevron appeared to move in a positive direction on Friday, after a meeting at the presidential palace ended on a high note over the possibility of utilising the Aphrodite field for Cyprus’ local electricity production.

Speaking to reporters after the meeting with Chevron’s delegation, Energy Minister George Papanastasiou said Chevron was “very positive” to the idea of supplying Cyprus with natural gas from the Aphrodite field, which would subsequently be used to fuel Cyprus’ electricity production at lower cost.

During the meeting, which included President Nikos Christodoulides and Chevron’s vice president Frank Cassulo, the parties discussed how to utilise the block as soon as possible. To this end, Chevron presented a preliminary development programme for the Aphrodite field, which Nicosia will explore in the next few days, so as to assess whether it is in line with Cyprus’ wishes, Papanastasiou said.

“We have indicated to the company the need to supply the Republic of Cyprus with natural gas for power generation purposes. The company did not reject this, saying it is one of the plans it can consider,” he added.

The minister also told reporters, there is a broader interest from gas firms on working with Cyprus’ energy plans, while Chevron will be attending next week’s two-day energy workshop titled: The Cyprus Gateway: Natural Gas to Power and Liquefaction, to hear more about the government’s energy strategy.

“We explained to Mr. Cassulo that our priority is to have natural gas reach Cyprus with the aim of using it on the local market to produce electricity via low-cost natural gas, which will then be passed on to the electricity prices.”

Any additional natural gas can either be used for liquification in Cyprus or go to another destination, Papanastasiou suggested.

Adding a sense of urgency, the minister said “we will be looking at Chevron’s plan in the next few hours and days, evaluate it and revert with our comments.”

Asked if there were any developments over the Yishai dispute with Israel, Papanastasiou explained Cyprus has submitted all its comments around two weeks ago. The aim is that when the energy minister plans to visit Israel on June 14 and 15, he can receive initial feedback.

“I don’t believe it will be our main topic of discussion, rather we will likely focus on the pipeline starting from Israel’s EEZ towards that of Cyprus.”

Indications so far show the A3 well has around 4.2 trillion cubic feet, with drilling set to give a better revelation of what is actually in the deposit as it focuses on the central part of the Aphrodite field.

Papanastasiou also specified Cyprus’ plans for Aphrodite are not hindered by the dispute with Israel. Though developments continue, it would be preferable not to have any obstacles over Yishai before commercialization.

Asked about interest from other energy companies in Cyprus’ that have already identified deposits and when they will return for confirmatory drilling or whether they have drawn up plans to develop the deposits – specifically for plots 6 and 10 – the energy minister cited ExxonMobil’s vice president’s comments from a day earlier as saying Cyprus’ EEZ was of interest to the company.

The vice president was also quoted as saying ExxonMobil is interested in drilling the area, most likely block 5 as it is the newest piece it has taken on.

“Our information is that the geological data for plot 5 is very promising. You understand that with these statements at the level of the vice president of a global organisation, especially an American one, in which he also mentioned that ExxonMobil is interested in the new energy plan of the Republic of Korea, as well as a liquefaction terminal in Cyprus, there started to be interest in what we are trying to do through Monday’s workshop, but also the meeting in Israel, for the purpose of natural gas flowing to Cyprus,” Papanastasiou stressed.

Asked to comment on the statements by ExxonMobil’s vice president that before the company proceeds with any development or exploitation of the deposits, the company wants to know the full potential of the area, therefore more drilling is a priority, the energy minister characterized this position as absolutely correct, as if there is not enough natural gas to flow in one direction high-cost infrastructure cannot be justified.

When asked whether companies located in the Cyprus EEZ or other players will participate in Monday’s workshop, Papanastasiou specified that all companies located in Cyprus’ EEZ will participate, some others that had expressed interest in the past, some which buy from other companies in Cyprus’ EEZ, as well as companies located in Israel’s EEZ.

“This particular workshop has attracted the interest of many companies and it is not only energy companies, but also technology companies, companies that build pipelines, investors interested in the region, as well as Israeli companies, whose interest is very important, some of which are also state-owned,” he added.