Yiannis Ioannou
Last Friday marked the conclusion of long-running negotiations between the Republic of Cyprus and the consortium developing the Aphrodite gas field, led by U.S. energy giant Chevron. At the same time, earlier this week, Nicosia signed agreements in Cairo, Egypt—steps deemed crucial for advancing both the Aphrodite field in Block 12 of Cyprus' Exclusive Economic Zone (EEZ) and the Kronos field in Block 6. Both fields, once in production, are set to supply Egypt. The Cypriot government even hailed the agreement as "historic."
The ‘Historic’ Deal
As previously reported by K on August 25, 2024, the Republic of Cyprus issued a notice of revocation to the Aphrodite consortium over its failure to submit the preliminary field development plan (FEED) on time. This move led to a standstill agreement on September 17, triggering intense negotiations and, eventually, Chevron’s submission of a revised development plan. On February 14, both sides finalized the agreement, aligning with Cyprus' demands for:
- Drilling of four wells in the Aphrodite field, with a projected daily output of 800 million cubic feet (MMCF).
- Production of natural gas using a Floating Production Facility (FPC).
The plan remains for Aphrodite’s gas to be transported via pipeline to Shell’s West Delta Deep Marine (WDDM) facility, 90 km off the Egyptian coast, before reaching the Damietta liquefaction terminal. The estimated development cost stands at $4 billion, with the field's production start date now projected for 2031—a staggering two decades after its discovery in 2011.
The Bigger Picture
According to NewMed Energy, the preliminary development phases (FEED and pre-FEED) are prerequisites before Chevron makes a final investment decision (FID). In practical terms, this means:
- No firm deadline exists for completing FEED, though K sources estimate a 9-10 month timeframe.
- Aphrodite’s production timeline is now pushed to at least 2031, with a possibility of further delays extending into 2035.
- The new agreement includes multiple conditions linked to the FEED phase, involving cost estimates, financing, geopolitical risks, security concerns, fluctuating gas prices, supply logistics, and technical hurdles related to transportation and market consumption.
- Even in the best-case scenario—where Chevron meets all deadlines and production starts in 2030—Cyprus won’t see any revenue until at least 2031-2033.
Meanwhile, a long-pending agreement with Israel remains unresolved. Tel Aviv claims that about 10% of the 3.6 trillion cubic feet (tcf) of gas in Aphrodite overlaps with Israel’s Ishai field. Sources indicate that Nicosia aims to finalize a co-development agreement with Israel soon, possibly involving a high-level visit.
Deals Signed in Cairo
On Monday, during the EGYPES 2025 Energy Show, Cypriot Energy Minister George Papanastasiou signed a Host Government Agreement with Egypt for exporting the Kronos gas deposits (Block 6), developed by Italian energy firm ENI. Additionally, a Memorandum of Understanding (MoU) was signed between Egyptian authorities and the Aphrodite consortium (Chevron Cyprus Limited - 35%, NewMed Energy LP - 30%, BG Cyprus Limited - 35%) to facilitate Aphrodite gas exports to Egypt’s Damietta terminal. However, these agreements remain non-binding.
President Nicos Christodoulides' visit to Egypt also included a high-profile meeting with Egyptian President Abdel Fattah al-Sisi, emphasizing a growing strategic partnership between the two nations, particularly in political and energy cooperation.
Finally, President Christodoulides met ExxonMobil Vice President of Global Exploration, John Ardill, in Cairo. The meeting, held on the sidelines of the EGYPES 2025 exhibition, covered ExxonMobil's progress in Block 5 of Cyprus’ EEZ and its plans for Block 10. The Electra prospect in Block 5 is considered a high-potential target, with estimated gas reserves between 10-30 tcf.
Cyprus’ Energy Future: Delays, Conditions, and Uncertainty
While the recent agreements signal progress, they also highlight the slow-moving nature of Cyprus’ energy ambitions. Aphrodite’s development has already spanned 14 years without production, and even under optimistic projections, Cyprus may have to wait another decade before seeing tangible benefits. With geopolitical tensions, market uncertainties, and unresolved regional disputes, the road ahead remains challenging.
*This article was translated and summarized from its Greek original
