Friday deadline for Chevron on Aphrodite gas deal

The government has given energy giant Chevron until Friday to put its position in writing concerning the commercial development of the offshore Aphrodite gas field, the energy minister revealed on Monday.

It was the latest in a series of extensions afforded to the company in the ongoing back-and-forth with the government.

Speaking to the Cyprus News Agency, Energy Minister George Papanastasiou said the exchange of letters between the two parties is only a part of the negotiations process.

“Several deliberations have been held, and others are taking place as well, in order to reach a commonly acceptable solution,” he added.

Though again expressing optimism the parties would clinch a deal, he declined to go into detail about the nature of the give-and-take.

He did however confirm that at least part of the dispute relates to the construction or not of a Floating Production Unit (FPU) atop a future production well at Aphrodite.

The minister advised the media to “be patient” and to avoid reporting information that might derail the sensitive talks.

“Achieving our goal is paramount,” he noted, evidently alluding to securing an agreement on developing the gas reservoir.

The joint venture with the concession on Aphrodite would save an estimated €1 billion by not building an FPU. For its part, Nicosia says having the platform would allow for greater gas recovery, thus maximising revenues for the Republic of Cyprus.

In May the joint venture submitted a revised development plan for the gas field. The Cypriot government rejected the amendments at the end of August, with the contract providing for 30 days of negotiations to resolve the dispute. The negotiation period was extended for another 30 days with a deadline on November 5, which was then pushed back again.

The joint venture also proposed building three production wells, instead of five as stipulated in the development plan agreed in 2019.

Discovered in 2011, the Aphrodite play holds an estimated 4.5 trillion cubic feet of recoverable gas.

Chevron are the operators and a 35 per cent partner in the field, along with Shell (35 per cent) and Israeli firm NewMed Energy (30 per cent).