Cyprus has rejected Chevron’s proposal for the Aphrodite Gas Field, giving them a six-month deadline to present a revised plan. The consortium, which includes Chevron, NewMed Energy, and BG Cyprus, must comply with specific actions to move forward with the field’s development.
Why did Cyprus reject the Chevron proposal for the Aphrodite Gas Field?
Cyprus rejected Chevron’s proposal for the Aphrodite Gas Field citing the plan as unsatisfactory. The government has given the consortium, including Chevron, NewMed Energy, and BG Cyprus, a six-month deadline to present a revised proposal that aligns with the Original Development Plan and to initiate the Front-End Engineering Design (FEED).
Aphrodite Gas Field Development Stalled
In a recent development, Cyprus has turned down a proposal from the consortium composed of Chevron, NewMed Energy, and BG Cyprus, which is part of the Shell group. Their plan was to carve a new path for the ‘Aphrodite’ natural gas field, positioned in block 12 of Cyprus’s exclusive economic zone (EEZ). The government has called the proposal unsatisfactory and has given the consortium a six-month deadline to comply with specific actions to propel the gas field’s development.
The energy ministry had earlier received an optimization proposal from Chevron, the primary operator of the field, on April 2. The proposal was intended to revamp the pre-agreed Development and Production Plan. Despite this, on April 30, 2024, the Cyprus energy minister sent a letter essentially rejecting the proposals, labeling them unacceptable to the Cypriot government.
Consortium’s Response and Government’s Stance
Following the government’s rejection, NewMed Energy conveyed this development to the Tel Aviv Stock Exchange. The consortium members have been asked to present their unconditional written consent to kick off the Front-End Engineering Design (FEED) within six months, adhering to the Original Development Plan. This extension would allow for the completion of the FEED and the finalization of an investment decision.
The partnership, consisting of Chevron with a 35% stake, BG Cyprus also with 35%, and NewMed Energy holding the remaining 30%, is now tasked with assessing the government’s letter’s implications. The Aphrodite gas field, discovered in 2011, harbors an estimated 4 trillion cubic feet of natural gas. Chevron, having acquired the field’s operator Noble Energy in 2020, had its initial development proposal, drafted by Noble in 2019, rejected by the Cyprus energy ministry in August 2023.
Future of Aphrodite Gas Field
Cyprus’s energy minister, George Papanastasiou, has put forth a clear message, emphasizing the need for a targeted approach with unequivocal timelines for the gas field’s exploitation. The consortium’s previous development submission, which hinged on a Floating Production Unit (FPU), faced criticism for lacking specificity and definitive schedules, leading to its classification as inadequate.
The discovery of the Aphrodite gas field was a significant milestone for Cyprus, potentially enhancing the country’s role in the region’s energy dynamics. The government has extended numerous deadlines in attempts to reach common ground with the consortium for the field’s development. Now, the spotlight is on the consortium’s next move, as they weigh the options and potential strategies in the wake of the government’s firm stance.
Why did Cyprus reject the Chevron proposal for the Aphrodite Gas Field?
Cyprus rejected Chevron’s proposal for the Aphrodite Gas Field citing the plan as unsatisfactory. The government has given the consortium, including Chevron, NewMed Energy, and BG Cyprus, a six-month deadline to present a revised proposal that aligns with the Original Development Plan and to initiate the Front-End Engineering Design (FEED).
What specific actions must the consortium take to move forward with the development of the Aphrodite Gas Field?
The consortium, which includes Chevron, NewMed Energy, and BG Cyprus, must comply with the Original Development Plan and initiate the Front-End Engineering Design (FEED) within six months to move forward with the development of the Aphrodite Gas Field.
How does the government view the consortium’s proposal for the Aphrodite Gas Field?
The government of Cyprus views the proposal from the consortium, consisting of Chevron, NewMed Energy, and BG Cyprus, as unsatisfactory. The government has emphasized the need for a clear and targeted approach with specific timelines for the exploitation of the gas field.
What is the estimated amount of natural gas in the Aphrodite Gas Field and who are the key players in its development?
The Aphrodite Gas Field is estimated to hold around 4 trillion cubic feet of natural gas. The consortium involved in its development includes Chevron with a 35% stake, BG Cyprus with 35%, and NewMed Energy with the remaining 30%. Chevron, who acquired the field’s operator Noble Energy in 2020, has been leading the development efforts.
