Clay Neff, Chevron’s president for Africa and Latin America Exploration and Production, is scheduled to visit Cyprus on Friday, days before the looming deadline for negotiations with the Cypriot government regarding the revised development plan of the Aphrodite gas field, the Cyprus News Agency (CNA) reported on Thursday.
The field is estimated to contain around 4.4 trillion cubic feet of natural gas.
Insiders informed CNA that Neff plans to hold meetings with President Christodoulides and Energy Minister George Papanastasiou.
Market analysts anticipate that the high-ranking Chevron official will seek an extension to the consultation period, which is due to expire on November 5. The aim is to reach a resolution to the ongoing dispute.
The consortium overseeing Aphrodite, comprising Chevron Corp, Shell Plc, and Israel’s Newmed Energy LP, submitted a revised development plan.
This new proposal involves significant cost-cutting adjustments compared to the initial plan submitted in 2019 by Noble Energy, the former field operator. The Cypriot government rejected the plan in late August, prompting a 30-day consultation period to resolve the dispute. This period was extended by an additional thirty days and is set to conclude this coming Sunday.
The heart of the discord revolves around the cancellation of a floating production unit (FPU).
The consortium’s current proposal suggests directing the gas through a 480-kilometre pipeline to the Idku LNG terminal in Egypt.
Furthermore, the revised plan outlines three production wells, down from the initial five, which are anticipated to reduce gas production.
Estimates indicate a considerable cost reduction in the consortium’s revised plan, primarily attributed to the removal of the FPU. The 2019 plan had an estimated capital expenditure of $3.6 billion.
The Cypriot government asserts that the FPU would extend the reservoir’s lifespan and optimise gas production. Its removal, however, would mean reduced gas recovery and subsequently decreased revenues. The infrastructure in question would also offer operational flexibility for the gas reservoir.
With the deadline for a resolution with Chevron fast approaching, Papanastasiou stated last Tuesday that Cyprus believes energy autonomy is achieved not solely through reserves but also via gas infrastructure.
“Our goal is this, which is why we persist on infrastructure,” he said.