Chevron official coming to Cyprus ahead of Aphrodite deadline

A top Chevron executive is anticipated to arrive in Cyprus on 3 November, just 24 hours before the end of the negotiation period to resolve the dispute over the updated development plan of the Aphrodite field, with estimated reserves of 4.4 trillion cubic feet of natural gas.

Clay Neff is President of Chevron Middle East, Africa, South America Exploration and Production Company.

As what have been described as well-informed sources told the Cyprus News Agency (CNA), Neff will have a meeting with the President of the Republic Nikos Christodoulides, and the Minister of Energy George Papanastasiou on the same day.

The extension in negotiations between the government and the company expires on Sunday, 5 November. Unconfirmed information from market stakeholders indicates the American giant’s high-ranking official will ask for a new extension in the discussions in order to find a solution to the dispute.

Chevron consortium together with Shell Plc and Israel's Newmed Energy LP had submitted an updated Aphrodite development plan to the government for approval. The new plan provides for the connection of the field to liquefaction infrastructure in Egypt via a subsea pipeline.

The updated plan was rejected by the Cyprus government in late August, with the contract providing for 30 days of negotiation to resolve the dispute. The negotiation period had then been extended for a further 30 days with a new deadline of 5 November.

A floating production unit is a point of contention

According to reports, the main point of contention is the cancellation of the plan included in the original 2019 development plan to build a floating production unit (FPU) to process the gas (remove water and oil derivatives) before it enters a 480km pipeline connecting the field to the terminal in Idku, Egypt.

At the same time, the updated plan reduces the number of production wells from five to three, resulting in lower production. Estimates point to significant savings for the consortium, compared to the $3.6 billion estimated cost of the 2019 plan.

Nicosia considers that the presence of the floating unit would extend the life cycle of the field, optimising production, while its absence would mean lower recovery of quantities and consequently less revenue. At the same time, it is considered that the absence of the FPU will not provide the necessary flexibility in the utilisation of natural gas.

In this regard, Papanastasiou had announced from the floor of a recent symposium in Nicosia, that Cyprus insists on these infrastructure projects.

(Sources: CNA, Reporter)