Cyprus Rejects Chevron Proposal for Aphrodite Gas Field

The government deemed the proposal inadequate and requested the consortium states its consent within six months on specific actions aiming to develop the gas field.

The energy ministry announced on April 2 that it had received a proposal by Chevron, the operator of the field, to optimise the agreed Development and Production Plan adding it would review the proposal and notify the consortium, which also include BG Cyprus (Shell) and NewMed Energy.

In a press release to the Tel Aviv Stock Exchange on Wendesday, NewMed Energy said “on April 30, 2024, the operator in the project received a letter from the energy minister in the Cypriot government, according to which the proposals for approval of an optimal development plan for the reservoir, in lieu of the Original Development Plan, which were presented by the partners to representatives of the Cypriot government on March 28, 2024, are not acceptable to the Cypriot government.”

NewMed added that in the letter, the partners were required to promptly confirm in writing their unconditional consent to commence performance of the Front-End Engineering Design (FEED) within six months from the date of the letter, in accordance with the Original Development Plan, in which case the partners will be granted certain extensions for compliance with the milestone for performance of the FEED and the milestone for the adoption of a final investment decision.

“The partnership intends, together with its partners in the Aphrodite Reservoir, to examine the implications of the letter received from the Cypriot government as aforesaid, and the possible courses of action available to them in relation thereto,” the press release added.

Sources told the Cyprus News Agency (CNA) that Chevron’s proposal was submitted on the basis of a Floating Production Unit (FPU), came under certain conditions and was deemed as not targeted and with no specific timeframes.

It was hence deemed inadequate; the same source told the news agency.

Energy Minister Geroge Papanastasiou informed the consortium in a letter on Wednesday.

In his letter, Papanastasiou pointed out the insufficient nature of the proposal and requested from the operator targeted actions.

He also requested that the company confirm its agreement on these actions and its commitment for the development of the gas field in a specific timeframe.

The consortium was given six months to respond.

Aphrodite gas field was discovered in 2011 and it is estimated to hold a gross mean of 4 trillion cubic feet of natural gas. US energy giant Chevron acquired Houston-based Noble Energy, the operator of the field, in 2020.

In August 2023 the energy ministry rejected a proposal by Chevron to change the initial Development and Production Plan which was drafted by Noble in 2019.

The government has given numerous extensions to the consortium with a view to find a common ground on the development of the gas field.

The consortium comprises Chevron (operator) with 35 per cent stake, BG Cyprus (Shell) with 35 per cent, and NewMed Energy with 30 per cent.

Source: Cyprus Mail