Cyprus rejects updated 'Aphrodite' development plan, Energy Minister says

Cyprus has rejected the updated development plan submitted by the US Chevron-led consortium that operates the gas field in the Cypriot EEZ, holding an estimated 4.5 trillion cubic feet of natural gas, Energy Minister George Panastasiou has been quoted as saying.

Speaking to Bloomberg News, Papanastasiou said the involved parties can now “enter into discussions to reach an agreement within a period of 30 days,” without elaborating on why the plan was rejected.

Chevron, along with Shell Plc and Israel’s Newmed Energy LP, have drilling rights in the Aphrodite offshore field. The partners in the Aphrodite reservoir submitted an updated plan for the Cypriot government’s approval that would connect the Aphrodite reservoir to an existing processing facility in Egypt via a subsea pipeline, NewMed Energy said in May.

According to Chevron, the updated plan is expected to reduce development costs and bring forward the start of production, Bloomberg said.

Speaking to MEES, Papanastasiou said “our decisions are not influenced by emotions or intended as a tactic against Chevron and its partners.”

“The primary cause for our reservations rest on the technical adjustments to the FDP. These changes seem to significantly benefit Chevron, neglecting our apprehensions about potential long-term risks they pose to the Aphrodite project from Cyprus’ standpoint,” he was quoted as saying.

According to MEES, the key adjustments concern reduced production wells, as well as the abolition of a planned Floating Production Unit (FPU) which will significantly reduce the development plan’s capital expenditure, which Nicosia believes will result in lower revenues.

“We cannot afford to let Chevron’s cost-cutting diminish the terms that safeguard our interests,” Papanastasiou told MEES, adding “our stance remains steadfast; our commitment lies with the 2019 production-sharing contract (PSC). We anticipate the Aphrodite consortium to honor this agreement. Any deviation should ideally enhance the existing FDP in collaboration with us.”

(Source: CNA)