Noble Energy, the primary concession holder on the Aphrodite gas field, has signalled they are putting on hold plans to develop and monetise the reservoir, while reiterating their commitment to the project.
In a statement provided to daily Politis, the US company said that tumbling commodity prices due to the economic fallout linked to the global coronavirus situation, have led them to “reconfigure” their work schedule in Cyprus as well.
While avoiding the term ‘delay,’ it could be inferred that Noble was hinting at exactly that.
“Reacting to the new state of play due to the Covid-19 pandemic and the drop in commodity prices, we are reconfiguring our work schedule in Cyprus, but we are keeping with our commitments to the Cypriot government,” the company said.
It added: “We shall continue working with the government and our partners, shaping the development plan for the Aphrodite reservoir according to global demand for natural gas and prevailing market conditions.”
On its global operations, the US company said it has cut back on capital expenditures planned for 2020 by approximately $900m (€800m), and also slashed operational costs and general and administrative expenses by $225m.
“Noble Energy is in a position to effectively deal with the current situation. The company remains financially robust, with high liquidity and a reduced cost structure. On May 18, Moody’s Investors Service confirmed Noble Energy’s Baa3 credit rating,” the company said.
In mid-April, Noble Energy’s shares took a tumble after the oil and gas producer said it was slashing its dividend by 83 per cent, further reducing planned capital expenditures and implementing employee furloughs and part-time programmes in response to the Covid-19 pandemic and the decline in oil and gas demand and prices. The company declared a quarterly dividend of 2 cents a share, down from a previous payout of 12 cents a share.
In November 2019, the Cyprus government granted the Noble-Shell-Delek consortium an exploitation licence for the Aphrodite gas field. The companies intended to pipe the gas to neighbouring Egypt.
According to Politis, at the time the consortium’s envisioned timetable went as follows: a second appraisal drilling (A3) at the reservoir by late November 2021; the carrying out of the Front End Engineering Design by end of 2021; a final investment decision within 2022; followed by a Gas Sales and Purchase Agreement; and the commencement of building a pipeline and other infrastructures to export the gas inside 2023, with an estimate time of completion and beginning of sales sometime in 2025.
Discovered in late 2011, the Aphrodite play holds an estimated 4.5 trillion cubic feet of gas. The concession is jointly owned by Delek Drilling (30 per cent), Noble Energy (35 per cent) and Shell (35 per cent).