Cyprus will earn $9.3 bln over 18 years from exploiting its Aphrodite gas field after Nicosia renegotiated a contract with industry giant Shell, US-based Noble and Israel’s Delek, the energy minister said Wednesday.
Energy Minister George Lakkotrypis told reporters that a re-working of the production contract ensures the Cyprus government receives an average yearly income of 520 million dollars over the lifespan of the gas field.
“We believe that it is a good deal under the circumstances, it will allow the Republic of Cyprus to earn significant commercial revenues estimated at over $9 billion during 18 years of the well’s lifespan,” Lakkotrypis told reporters.
He said the figures were based on the average price of oil being around $70 a barrel.
Lakkotrypis said under the new deal, the consortium was obliged to keep to a tight deadline to tap the gas reserves.
“Based on the development and production plan that we discussed, we expect the first gas to be extracted by 2024-25."
Previously the consortium had no obligation to stick to a timeline, no natural gas is expected to flow from Aphrodite and be pumped to Egypt via a pipeline.
The minister said it was the “biggest development project” on the island with around 7.9 bln dollars invested in infrastructure.
“This deal will have multiple benefits…direct benefits from revenue, indirect benefits from economic activity, and geopolitical benefits because we are cementing our relationship with Egypt,” said Lakkotrypis.
Texas-based Noble Energy in 2011 made the first discovery off Cyprus in the Aphrodite block estimated to contain around 4.5 trillion cubic feet of gas – it has yet to be commercialised.
The discovery of nearby Egypt’s huge Zohr offshore reservoir in 2015 has stoked interest that Cypriot waters hold the same riches.
Cyprus aims for natural gas to start flowing to Egypt’s LNG facility as soon as possible via pipeline.
Cyprus has pushed ahead with exploring for offshore energy resources despite the collapse in 2017 of talks to end the country's decades-long division.
That has angered neighbouring Turkey, which has had troops stationed in the country since 1974 when it invaded and occupied its northern third in response to a coup sponsored by the military junta then ruling Greece.
Last month, Turkey was widely condemned for sending a drillship inside Cyprus’ exclusive economic zone after announcing it would begin its own energy exploration.
In February, ExxonMobil and Qatar Petroleum discovered a huge natural gas reserve off the coast of Cyprus, the Mediterranean island's largest find to date, holding an estimated five to eight trillion cubic feet.
The Italian state-controlled ENI and France’s Total are also heavily involved in exploring offshore Cypriot oil and gas.
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