NewMed Energy: Final decisions on Aphrodite by 20 November

Israel’s Newmed Energy said final decisions regarding the development of ‘Aphrodite’ gas field will be made on 20 November, in a statement on the Tel Aviv Stock Exchange.

It added that its consortium partners – operator Chevron and Shell – would also be considering their course of action on the matter.

Chevron had asked for an extension in talks over a modified development plan for Aphrodite. Development of the field had been the subject of dispute, after the consortium submitted a modified plan this year which Cyprus considered went back on a 2019 field development plan agreed by all sides.

According to NewMed Energy's statement, Chevron received a letter from the Cypriot Energy Ministry on 5 November, informing it of an extension granted to the consortium partners to comply with the development plan.

This extension will push the date for the government’s final binding decision on the partners’ request to November 20, while the compliance date will be postponed for around two months, to 7 January, 2024, to allow the partners to confirm their consent to the development plan and sign an amended agreement.

"The Partners in the Aphrodite Field intend to examine the significance of the Cypriot government’s letter and the possible courses of action available to them in relation thereto," NewMed Energy said.

The modifications removed a floating processing unit (FPU) and cut the number of production wells to three from an initial five. The initial plan had been prepared by Noble, an independent operator which Chevron acquired in October 2020, when estimated reserves were in the region of 4.5 tcf.

An updated assessment following a new appraisal well this year lowered the estimates to around 3.5 tcf.

Nicosia considers the FPU essential in extending the lifespan of the field, while Chevron, backed by the U.S. administration, considers the modified plan will help get gas to the market faster and does not involve building costly large infrastructure.

Talks to bridge a rift over pared-back plans for the 3.5 trillion cubic feet (tcf) field south-east of Cyprus went down to the wire, with Cypriot authorities responding to Chevron very late on Sunday, when negotiations were due to expire.

Aphrodite gas field is an offshore gas field off the southern coast of Cyprus located at the exploratory drilling block 12 in the country's maritime Exclusive Economic Zone. and bordering the Yishai gas field, located in Israeli territorial waters.

The joint venture awarded exploration and exploitation rights consists of Chevron Cyprus (operator) and BG Cyprus (Shell) with 35% and NewMed with 30%. In November 2019, the Government of Cyprus granted the partners in Block 12 a production license for 25 years, with an option to extend the term by another 10 years, together with the approval of an outline for development of the reservoir.

Meanwhile, Israel and Cyprus have been in dispute over Aphrodite as part of the gas field is in Israeli waters; they have yet to reach an agreement on the distribution of profits since its discovery 13 years ago.