Cyprus' energy gamble: Big promises, bigger delays, but a game-changer may be coming

Last week in Cairo, authorities from the Republic of Cyprus signed a non-binding host country agreement for the development of the Kronos gas field in Block 6 of Cyprus' Exclusive Economic Zone (EEZ). The deal with Italian energy giant ENI reaffirmed previous reports of an accelerated development timeline and highlighted 2025 as a pivotal year for Cyprus' energy strategy.

This agreement, hailed as a strategic milestone by Nicosia, followed another major breakthrough: the long-awaited resolution on Aphrodite—Cyprus' first natural gas discovery in Block 12. After years of delays and tough negotiations, the government finally approved Chevron's revised development plan, underscoring both progress and lingering challenges in the island's energy ambitions, 14 years after the Aphrodite field's initial discovery in 2011.

Where Things Stand with Aphrodite

As previously reported, the Cypriot government had issued a license revocation notice to Chevron last August due to delays in submitting the preliminary field development plan (FEED) for Aphrodite. This move led to a standstill agreement on September 17, triggering intense negotiations that eventually resulted in Chevron's revised plan, approved on February 14.

The new agreement includes:
- Four new wells to be drilled at Aphrodite, with a targeted daily output of 800 million cubic feet of gas.
- A Floating Production Facility (FPC) as the designated method for gas extraction and processing.
- A total investment cost of $4 billion, at a time when Chevron is globally cutting gas production costs and reducing its workforce by 20% (9,000 employees).

A Good Deal or a Strategic Compromise?

The Chevron deal has sparked heated debate among energy experts, especially after NewMed Energy, one of Aphrodite’s joint venture partners, disclosed additional details in an announcement to the Israeli stock exchange. According to these reports:

• First gas from Aphrodite is expected in 2031—a 20-year delay from its initial discovery and more than a decade after its commercial viability was declared.
• Chevron must still complete preliminary development phases (FEED and pre-FEED) before moving forward.
• Questions remain about the unresolved Aphrodite-Ishai border dispute between Cyprus and Israel. Israel claims around 10% of Aphrodite’s 3.6 trillion cubic feet (tcf) of gas, as it is believed to extend into Ishai, a neighboring Israeli field.

Cyprus is now pushing to finalize a co-development agreement with Israel, with a potential high-level visit expected in the near future.

Looking ahead, the success of the Chevron deal hinges on three key factors:

1. Chevron meeting agreed-upon deliverables within the expected 9-10 month timeframe.
2. A timely Final Investment Decision (FID) to ensure the project proceeds as planned.
3. A swift resolution to the Aphrodite-Ishai dispute to prevent further delays.

With Cyprus having lost its leverage to revoke Chevron’s license, any further setbacks could significantly impact the country’s energy timeline.

ExxonMobil’s High-Stakes Drilling at Electra

Meanwhile, U.S. energy giant ExxonMobil is making waves in Cyprus’ EEZ. On March 10, John Ardill, ExxonMobil’s Vice President, will visit Cyprus to provide an update on the company’s highly anticipated drilling at Electra, a promising prospect in Block 5.

• The drilling campaign has sparked high expectations, with estimates suggesting a potential 10-30 tcf gas discovery—a find that could transform Cyprus’ energy landscape.
• If successful, Electra could enter fast-track development, leapfrogging Aphrodite in the race to production.
• The Valaris DS-9 drillship is currently conducting exploratory drilling through 5-6 km deep salt formations, where hydrocarbons are typically found.

ExxonMobil is set to provide a preliminary update to Cypriot authorities by late March, with official results expected in early April.

Looking Ahead: A Defining Year for Cyprus’ Energy Future

With multiple energy giants making key moves in Cyprus' EEZ, 2025 is shaping up to be a turning point for the country’s hydrocarbons sector. While Kronos and Electra hold promise for accelerated development, Aphrodite's prolonged delays raise questions about Cyprus’ ability to turn discoveries into commercial success stories.

As regional dynamics, geopolitics, and global energy market shifts continue to play a role, all eyes will be on how Cyprus navigates these critical energy deals in the coming months.

*This article was translated and sumarized from its Greek original.  To read more of  Yiannis Ioannou's article and gain full access to in-depth reports (in Greek), subscribe now to Kathimerini's print edition and stay informed with comprehensive coverage on this and more!