Insiders say USA is frustrated with Nicosia’s ‘wheeler-dealing’ with Chevron

The USA appears frustrated with Nicosia and especially with Energy Minister George Papanastasiou, against the background of the government’s ongoing negotiations with Chevron regarding the exploitation of the "Aphrodite" gas field.

At the same time, business insiders- and others- who spoke to InBusinessNews, point to and put emphasis on the magnitude of the negative development that a possible withdrawal of Chevron will entail for the Republic of Cyprus. This would see Cyprus effectively losing an important and global player in the energy sector-the second largest company of its kind in the world. They say that through its presence here Chevron can, in addition to other benefits, also ensure stability on a geopolitical level with regard to the implementation of the drilling programme of the Republic of Cyprus. At the same time, the company is prepared to proceed with the development of the field.

Specifically, the frustration, which, as InBusinessNews has learned, was also conveyed to business circles by the US Ambassador in Nicosia Julie Fisher, lies in the breach of the agreement on the embargo of statements until the final conclusion of discussions (between the government and Chevron), something that was decided during last Friday’s meeting at the Presidential Palace.

It is recalled that in light of the end of the negotiation period with Chevron for "Aphrodite" on the 5th of the month, a meeting was held last Friday between the President of the Republic Nikos Christodoulides and the President of Chevron Middle East, Africa, South America Exploration and Production Company Clay Neff, in which the Minister of Energy, Trade and Industry George Papanastasiou, and the Attorney General George Savvides also participated.

Although no statements on the substance of the outcome of the meeting were made after the meeting, it was subsequently leaked and later confirmed by the Energy Minister that the company had requested a further four-month extension of the negotiation period to amend the "Aphrodite" development and production plan, while also requesting a four-month extension of the deadline for starting the Front-End Engineering Design (FEED) study.

When asked about this, both the President of the Republic and the Minister of Energy replied that until Chevron's position on the response of the Republic of Cyprus was received, the Government would not make any further comment.

However, just 48 hours after the meeting at the Presidential Palace and the agreement of both sides that no statements would be made, the Minister of Energy granted a television interview (to Alpha) and proceeded to reveal the Government's proposal to the company with the aim of breaking the impasse, while similar comments - which essentially outlined the facts at hand - were made when the Minister of Energy addressed the recent Economist conference.

In view of this, and according to information obtained by InBusinessNews, the US side has complained of unreliability and an approach to the entire issue in a manner that causes ‘cracks’ in the trustful relations that have been built between the two countries, particularly in recent years, and which are resulting in the further development of the political and economic nature of cooperation.

The same sources speak of a damaging scenario that may be created and which should be prevented by any means necessary so that the enormous efforts that are being made and bringing about results in terms of business cooperation and the attraction of US investments in Cyprus are not put in jeopardy.

After all, as indicated in this regard, the US companies that come to our island stay for a long time and have a lasting contribution to the Cypriot economy, something which should be taken into account accordingly when making any decisions that may negatively affect these business ties.

Indicative is a post by the US Ambassador to Cyprus, Julie Fisher, after her recent meeting with the American Chamber of Commerce in Cyprus (Amcham Cyprus).

“As American Ambassador,” she wrote, “my consultations with (US) business representatives are crucial. Thanks American Chamber of Commerce in Cyprus (AmCham Cyprus) for the timely discussion of the trajectory of the business climate in Cyprus and the impact on our ability to attract investment and build future ties."

It should be recalled that the consortium for "Aphrodite" consists of Chevron Corp with 35% (operator), BG Cyprus (Shell), and Newmed with 30%. , It is also worth recalling that the Chevron consortium together with Shell Plc and Israel's Newmed Energy LP had submitted for approval an updated development plan for "Aphrodite" to the government, which provided for the connection of the field with liquefaction infrastructure in Egypt through a subsea pipeline.

The updated plan was rejected by the Cypriot government at the end of August, with the contract providing for 30 days of negotiation to resolve the dispute. The negotiation period had been extended for another 30 days with a deadline of 5 November.

Speaking before the House Finance Committee last week, George Papanastasiou had declared that the government insists that "the parties honour their signature", referring to the original plan of Noble Energy and in particular for the construction of a floating production unit (FPU) above the deposit. The FPU, as he had said, would allow greater gas recovery and consequently maximise revenue for the Republic of Cyprus.

"Chevron's proposal leaves us in serious uncertainty, the field will be developed based on Chevron's interests in the first period, in the second period there will be no gas," he had said.

(Source: InBusinessNews)