Yiannis Ioannou
The final phase of negotiations for the development of the Aphrodite field, led by Chevron's consortium in Block 12 and the Republic of Cyprus, is approaching its deadline, set by Nicosia for the commencement of FEED operations on the upcoming Sunday, November 5. The well-known disagreement, primarily of an economic nature compared to the previous 2019 development plan for the sea block, has been a subject of extensive analysis in the Cypriot press. Questions persist about which side is responsible for the deadlock and whether Chevron will depart or Nicosia will revoke its license for the block.
As one delves into these discussions, it becomes apparent that this matter is less about analysis and more about various parties expressing their desires, rather than providing an accurate representation of reality and facts. Negotiations of this kind are inevitably influenced by the competitive pursuit of cost-benefit ratios, external influences, the volatile nature of the energy industry, which includes fluctuations in gas and oil prices, and the complex geopolitical interests in the Eastern Mediterranean.
Unless unforeseen circumstances intervene, it is likely that both sides will agree to an extension, perhaps for a few months, to reassess progress in early February or March. Consequently, the prevailing scenario suggests that the development of Aphrodite will face further delays, despite its discovery dating back 12 years to 2011. The Republic of Cyprus has not yet integrated hydrocarbons into a production system that encourages cost-effective production for consumers.
Recalling the discussions in Cyprus in 2011, the prospect of hydrocarbons generated exaggerated debates about economic development and geopolitics. Fast-track development strategies were absent from the economic dimension, and the discourse ranged from the Cyprus settlement to positioning the Republic of Cyprus as a leading player in hydrocarbon production in the Eastern Mediterranean. However, these dimensions failed to progress substantially and are now impeding progress in the Aphrodite gas fields amid the current negotiations and deadlock.
The handling of "gas" and the energy policy in recent years in the Republic of Cyprus appears to lack a coherent, strategically planned institutional framework with clear objectives, means of achieving them, and how the confirmed fields in our Exclusive Economic Zone (EEZ) will benefit the entire state. This is another policy area in Cyprus characterized by a lack of continuity, consistency, and planning, often leading to a return to square one. Regardless of the eventual outcome, the Aphrodite impasse serves as a reminder of our failure, beyond Chevron's interests, to establish a consistent and institutionally coherent strategy.
[This article was translated from its Greek original]
