Cyprus Mail

Positive data from latest drilling says minister

The recent appraisal well drilled at the Aphrodite reservoir appears to confirm previous estimates on the amount of recoverable gas there, the government said on Tuesday.

“The data looks positive. The drill confirms Chevron’s prior estimates of 4.2 trillion cubic feet of natural gas in place, with possibly a slight increase in that number,” Energy Minister George Papanastasiou told the state broadcaster.

A day earlier, the minister spoke of “good news” from the A3 well at Aphrodite, the drill having been completed on July 13. He said the companies are now assessing the data and would give their final findings by the end of August.

The Aphrodite reservoir is compartmentalised, comprising three major, non-communicating compartments.

Now that the middle, and largest, compartment has been appraised, it appears to have confirmed prior gas estimates – hence the minister’s comment about “good news.”

But asked what this means in terms of monetising the reservoir – first discovered in 2011 – the minister demurred, saying they are currently going over Chevron’s revised development plan.

The government has until the end of August to assess the plan, after which it will provide its comments to Chevron – operators of the field. Next, the contract stipulates 30 days of negotiations with the operator.

Chevron proposes to send the gas to Egypt and to liquefaction plants there.  The revised development plan for Aphrodite proposes to use Shell’s existing facilities in Egypt, obviating the need to build expensive new processing and production facilities. This will reduce development costs substantially in comparison to the original blueprint.

But the new administration is apparently unenthusiastic about the plan, and about the timeframe. Chevron proposes to start production by early 2028.

Meantime, both Nicosia and Tel Aviv have talked up plans to pipe Israeli gas to Cyprus. The two governments are in advanced talks on the issue.

Asked about this, and what the government might do if it rejects Chevron’s plan, Papanastasiou said:

“We will tell them [Chevron] that, ideally, the optimal solution – if we did not have prior contractual obligations – would be for part of the gas [from Aphrodite] to come to Cyprus.”

The Israel import option was still open, he added.

The Aphrodite gas play lies in offshore Block 12 of the island’s exclusive economic zone.

Another issue with the field relates to how the gas would be shared between the joint venture in Cyprus and the Ishai group owning the licence on the Israeli side of the EEZ boundary. This has been discussed ever since the discovery of Aphrodite, but without success so far.

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