The Cyprus government is willing to renegotiate terms with an energy consortium, following concerns on the part of companies that worry new developments and low gas prices would render a current deal not profitable.
In a meeting on Tuesday at the Presidential Residence in Troodos, the cabinet decided to appoint a task force committee to renegotiate contract terms with energy companies Noble, Delek, and Shell.
The companies recently expressed concern that the current agreement with the Republic of Cyprus was not profitable, citing ongoing low selling prices of liquefied natural gas over the cost for the companies undertaking the project.
New terms offered by the companies were deemed “not acceptable” by the government, with the cabinet resorting Tuesday to appointing a special task force to carry out consultations in order to negotiate mutually acceptable terms.
'We have concluded that the best option is to try and find a mutually acceptable solution with the consortium'
Energy Minister Giorgos Lakkotrypis, who admitted to the challenges due to to low gas prices back in March, called on observers and the media to allow time for consultations to take place.
“We have concluded that the best option is to try and find a mutually acceptable solution with the consortium, so that the development of the Aphrodite gas field can go forward the soonest possible,” Lakkotrypis said.
The development would provide a number of financial and geopolitical advantages, the minister added.
Lakkotrypis and Finance Minister Harris Georgiades will both sit on the committee, along with ministry consultants and advisors, Cyprus Hydrocarbons Company officials, and Legal Services Department staff.
“This is a very sensitive topic,” the minister told reporters, calling on the media to “limit what we say and write publicly during the consultations phase.”
Aphrodite was discovered in 2011 in block 12 of Cyprus’s exclusive economic zone (EEZ).
The original partners for developing Aphrodite, Noble Energy and Delek Drilling, declared the field commercially viable in 2015.
BG Cyprus, a subsidiary of British multinational BG Group, later joined the partnership while at the same time BG was being acquired by Royal Dutch Shell Gas Company.