Final Decisions for ‘Aphrodite’ gas field to be made today - IN-CYPRUS

20 November 2023

The final decisions regarding the development of the ”Aphrodite’ gas field are expected to be made today, as the government presents its ultimate verdict to Chevron regarding a potential extension for compliance with the Front-End Engineering and Design (FEED) commencement milestone.

Recalling the terms of the Proportional Sharing Agreement, agreed upon in 2019, the milestone for the initiation of the Front-End Engineering and Design (FEED) development of the field was set for November 7, 2023.

However, a modified development plan was submitted by the company last May, which was rejected by the Republic of Cyprus last August.

Following this, two extensions to the consultation process were granted, with the final deadline set for November 5

The consortium subsequently requested a four-month extension to the entire process.

Aphrodite gasfield has certainly resurfaced - CYPRUS MAIL

George Papanastasiou, Cyprus' Energy Minister

June 12, 2023
Dr Charles Ellinas

Despite challenges, the latest plans for the development of Aphrodite are more serious and realistic

Aphrodite is back in the limelight. On May 31 NewMed submitted an updated development plan to Cyprus’ government, on behalf of the field joint venture (JV) that includes Chevron as the operator and partner Shell. This is based on transporting the gas to Shell’s West Delta Deep Marine (WDDM) existing processing and production facilities offshore Egypt, from where it will be transported to the mainland eventually for domestic consumption or for export as LNG. First gas is expected by 2028.

This goes against George Papanastasiou’s, the energy minister, wishes for the Aphrodite partners to prioritise supply of gas to the island. In April he said that he didn’t think that gas from the Aphrodite gasfield should end up in Egypt’s liquefaction terminals.

“Our approach around the use of natural gas as a transition fuel is being reviewed and we are including the natural gas found in the East Med, and more specifically Cyprus’ EEZ, in the mix for use in the domestic market,” he said.

ExxonMobil, Qatar awarded Block 5 gas rights - CYPRUS MAIL

December 2, 2021
George Psyllides

The cabinet on Thursday awarded natural gas exploration rights for an offshore block to a consortium made up of ExxonMobil and Qatar Petroleum.

Energy Minister Natasa Pilides said ExxonMobil would be administering the Block 5 concession with a share of 60 per cent.

“In addition, I have been authorised to sign on behalf of the Republic of Cyprus, the exploration and production sharing contract agreed with the consortium after intense negotiations,” the minister said.

ExxonMobil and partner Qatar Petroleum plan on drilling an appraisal well in Block 10, where natural gas was discovered, towards the end of November or early December.

First exploitation licences set to be issued for Cyprus EEZ - CYPRUS MAIL

July 21, 2019

Katy Turner

The Council of Ministers is expected issue exploitation licences for the Aphrodite field, Energy Minister Giorgos Lakkotrypis said on Sunday.

“Regarding the agreements with Total and Eni, we are currently working on the legal details and they are expected to be brought before the Council of Ministers in the coming days for the relevant decisions,” he said.

As far as the Aphrodite field is concerned he said, “we are in negotiations with the consortium to come up with a jointly acceptable plan for development and production, which must be submitted to the Council of Ministers to issue exploitation licences for the Aphrodite field, marking the first time that such licences will be issued for the Cyprus EEZ (Excusive Economic Zone)”.

This is the third type of licence that is issued to interested companies. The first, a prospecting licence allows the geological evaluation of an area, while the second, an exploration licence allows for exploratory drilling to take place. If a discovery is made, the licensee then has the right be granted an exploitation licence.

Red Sea gas scramblers have until mid-September to submit bids to Egypt’s GANOPE - ENTERPRISE

Monday, 22 July 2019

Scramblers have until mid-September to submit bids for Red Sea exploration: The South Valley Egyptian Petroleum Holding Company (Ganope) has extended to mid-September the deadline for submitting bids in its tender for 10 oil and gas exploration blocks off the Red Sea, an unnamed Oil Ministry official said. The deadline, which was previously set for early August, was extended to give more companies a chance to join in.

Background: Ganope launched the tender last March for 10 oil and gas exploration blocks under new production sharing contracts. The new terms give producers a larger share of the output and allow them to sell their share to non-government entities of their choosing, provided they obtain approvals from each of Ganope, EGAS, and the EGPC.

Scrutinising the Aphrodite gas deal - CYPRUS MAIL

June 9, 2019

Charles Ellinas

This week’s deal with Noble, Delek and Shell divvying up the profits from the Aphrodite gas-field is not quite what it seems at first glance

The good news is that an agreement has been reached between the government and the Noble Energy, Delek and Shell joint venture (JV) on a revised Production Sharing Contract (PSC) for the development of the Aphrodite gas-field.

Based on published reports the agreed profit split is now about 57 per cent to Cyprus and 43 per cent to the JV, when the price of oil is $70/barrel – with Cyprus’ share going up when the oil price goes up and down when the oil price goes down. With long-term forecasts estimating the average oil price range to be $60-$70/barrel, there can only be a downside for Cyprus. That’s why the JV was so keen on this renegotiation.

There are also new provisions to ensure development of Aphrodite within a strict timetable, with penalties to the JV if it is not. This of course is what the JV wants too – to develop the project as soon as possible.

Egypt puts eased rules for energy companies to use their production share from new Red Sea concessions - ENTERPRISE

Wednesday, 27 March 2019

Companies awarded concessions in Red Sea bid round can sell at home or abroad: The South Valley Egyptian Petroleum Holding Company (Ganope) will allow companies awarded concessions in the ongoing Red Sea bid round to decide what to do with their share of output, Al Shorouk reports. Companies looking to sell natural gas to third parties inside Egypt will be required to get approvals from Ganope, EGAS, and EGPC, as well as further approvals from the oil minister on the quantities, price, and sales contract. Any exports of natural gas or liquefied petroleum gas (LPG) from these concessions will also require ministerial sign-off on the quantities and price.

Background: Egypt launched a tender earlier this month for 10 oil and gas exploration blocks off the Red Sea coast under a new production sharing contract, according to a Ganope statement (pdf). The Oil Ministry has been reportedly planning to roll out new production sharing contracts with friendlier terms for international oil companies this quarter.

EGYPS Day 1 Highlights - ENTERPRISE

Tuesday, 12 February 2019

New, investor-friendly production-sharing agreements are in the spotlight as gov’t pushes Egypt as a regional energy hub. The three-day Egypt Petroleum Show, which got underway yesterday, is best thought of as the physical embodiment of the Sisi administration’s strategy to position Egypt as the premier eastern Mediterranean energy hub. Domestic and international media offered wall-to-wall coverage.

If you read nothing else, read this from Reuters: “Egypt’s gas output will get a boost this year as the country’s huge Zohr field nears peak production and with USD 1.8 bn in investment from BP, officials said on Monday, as Egypt returns to export markets and positions itself as a regional hub.” Egypt is leveraging its “strategic location and well-developed infrastructure to become a key international trading and distribution center for gas, a potentially remarkable turnaround for a country that spent about USD 3 bn on annual liquefied natural gas (LNG) imports as recently as 2016.”

Digging into the highlights from yesterday:

Gov’t puts pen to paper on strategy for Egypt’s energy hub ambitions - ENTERPRISE

Thursday, 3 January 2019

Gov’t puts pen to paper on EastMed energy hub strategy: A government committee has drafted a strategy to advance Egypt’s plan to become the premier energy hub in the Eastern Mediterranean region, according to a Cabinet statement. The strategy involves studying and benchmarking similar projects elsewhere, conducting a cost–benefit analysis, and devising short- and long-term action plans. We could also see our ports become the first to set up natural gas marine fuel stations along the eastern Mediterranean. The committee will hand its recommendation to cabinet for review.

This comes as friendlier oil and gas contracts are set to take effect this quarter: We had noted last October that the Oil Ministry is planning to roll out new production sharing contracts with friendlier terms for international oil companies. The new framework, which is set to take effect this quarter, would grant the companies a larger share of the output and allow them to sell their share of production to anyone they like. This would replace the current, more rigid system, which gives producers only one-third of output and sets the government as the only buyer of their share of production at preset prices. Taken with a push — emphasized last week by President Abdel Fattah El Sisi — for more refining capacity as well as for the repayment of arrears to E&P companies, the move could significantly improve an already bright climate for oil and gas players in Egypt.

Egypt to offer new production model to foreign oil and gas firms - INDIA TIMES / REUTERS

REUTERS | October 26, 2018, 15:57 IST

CAIRO: Egypt is working on a new production sharing model with foreign energy companies to encourage oil and gas exploration in deep waters, Petroleum Minister Tarek El Molla said on Thursday.

"We are thinking of having... a simpler way of having the calculations with our partners," Molla said during a US business meeting in Cairo.

"So far the feedback that we received from different partners is very positive and they are enthusiastic to participate in the bid round on this basis," he said.

Under the new model, companies will be offered a share of production in exchange for bearing the costs of exploration and production.

"It will be all together and one figure that includes cost recovery and the profit share of the partner, so we don't go towards what we call cost recovery audits, which sometimes take effort, (create) arguments between different departments and,...for new frontier areas, it wouldn't be encouraging."

Molla said that bigger oil companies wanted the new model especially for risky deepwater frontier areas in the Red Sea and the Mediterranean near the Libyan border that are coming up in the next two bid rounds.

Gov’t giving oil majors friendlier terms in production sharing contracts - ENTERPRISE

Monday, 3 September 2018

Gov’t giving oil majors friendlier terms in production sharing contracts: The Oil Ministry is looking to keep international oil companies happy, having recently rolled out new production sharing contracts with some IOCs that leave the companies larger shares of profits from concessions in a bid to cut the time it takes for the companies to hit profitability on any one concession, ministry sources tell Al Masdar. 

The changes include eliminating a clause in the model contract that required the companies cede a additional points in their concessions to the government every two years. The new agreements also apparently raise the cost-recovery ceiling to 40% of the oil or gas produced by a concession, up from 35%, the newspaper claims. Oil and gas companies were consulted during the drafting of the changes and their recommendations factored into the changes, the source said. 

Caveat lector: The single-source story doesn’t cite anyone from the private sector, so we’ll be looking into this in a bit more detail in the days ahead.

CYPRUS: Gas pipeline to Egypt a done deal but there is a snag - FINANCIAL MIRROR

07 August, 2018

Nicosia and Cairo have agreed to build a gas pipeline from the Aphrodite field in Block 12 to Egypt, but those reserves could remain untapped in a row over profits.

The deal could come unstuck if the government does not strike a compromise on profit sharing with the consortium licensed to exploit Block 12.

CyBC TV said the agreement, already approved by Brussels, is undergoing the finishing touches before it is signed at an official ceremony in the Autumn.

An Energy Ministry official has briefed the political parties on new demands by US firm Noble, UK-Dutch Shell and Israel’s Delek to exploit Aphrodite gas.

They want a change in the product-sharing contract which outlines the percentage of revenues to be received by the state in any commercial deal.

The three companies have proposed a ratio change of 60-40 in favour of the Republic of Cyprus be reversed so that Noble, Shell and Delek receive the lion’s share of the 60% instead.

Such a reversal in the profit ratio would see the state lose in the region of €2.5 bln to the consortium.

Indications that gas finds will be high in block 10 - CYPRUS MAIL

AUGUST 5, 2018

Elias Hazou

ExxonMobil and Cyprus could hit the jackpot later this year when the US energy behemoth bores down into the seabed in search for natural gas. But according to an energy analyst, the potential windfall could have broader ramifications for the government’s arrangements with other companies operating in the island’s exclusive economic zone.

Charles Ellinas tells the Sunday Mail of highly sanguine chatter inside the industry over the potential of block 10, located southwest of Cyprus and licensed to a consortium of Exxon and Qatar Petroleum.

The seismic data is extremely encouraging.

Weeks ago, Ellinas was speaking to a senior executive of one of the companies that had bid for block 10 but did not get the contract.

“He told me: ‘If they [Exxon] don’t find something big there, I’ll quit my job’.”

Government considering its gas options - CYPRUS MAIL

JULY 31, 2018

Elias Hazou

The government is said to be mulling its options after the consortium holding the license for the Aphrodite gas field proposed amending the revenue-sharing agreement with the Cypriot state.

Under the proposal recently floated by the consortium of Noble, Shell and Delek, the overall long-term revenues to the state would decline by €2.3 billion – according to daily newspaper Politis – or by up to 20 per cent compared with the current contract, daily Phileleftheros reported.

On Monday, energy minister Giorgos Lakkotrypis gave a behind-closed-doors briefing to MPs on the overall state of play in the hydrocarbons sector, with emphasis on Aphrodite gas.

According to information that has leaked, Lakkotrypis told lawmakers the government rejects the consortium’s specific proposal.

Egypt to re-draft Oil & Gas contracts by end of 2018, adding new E&P incentives - ENERGY EGYPT / DAILY NEWS EGYPT

August 24, 2017

The petroleum committee met foreign partners to discuss their suggestions for amendments.

The Ministry of Petroleum has formed a joint committee to re-draft the petroleum agreements and to add incentive terms for foreign investors in the petroleum sector. The new committee consists of the Egyptian General Petroleum Corporation (EGPC), the Egyptian Natural Gas Holding Company (EGAS), the Ganoub El Wadi Petroleum Holding Company (Ganope), and a global consultant.

A source in the petroleum sector told Daily News Egypt that the committee has been mandated to review the similar petroleum agreements in other countries and develop new formats by the end of 2018.

He said that the amendments will include changing the partners’ production shares and decrease the reimbursement periods to stimulate foreign investment in the Egyptian petroleum sector.

Results from Block 11 will determine ENI’s next targets - CYPRUS MAIL

AUGUST 10TH, 2017

Italian energy giant ENI expects the results of exploratory drilling in Cyprus’ offshore Block 11, to determine its next drilling target within the island’s exclusive economic zone (EEZ).

Sources told Cyprus News Agency that ENI was preparing for two drillings, which should be completed by the first quarter of 2018, but the targets had not yet been determined. The company wants first to evaluate the results of drilling by Total /ENI Consortium in Block 11.

The company has applied to secure all permits for drilling for three blocks, 8, 6 and 3 which include an environmental study, the offshore protocol and a licence from the department of labour for the safety of the drilling.

Hydrocarbon licensing changes avoided ahead of Crete tender - ENERGY PRESS

04/08/2017

The government has softened its stance on an intention to implement hydrocarbon sector revisions that could offer investors production sharing agreements rather than leasing agreements for new tenders.

Governmemt officials fear that such changes to the licensing system would undermine the prospects of future tenders, including an imminent effort aiming to offer investors blocks off Crete. This upcoing effort has drawn the attention of international oil industry giants such as ExxonMobil and Total.

KYSOIP, the Government Council for Economic Policy, which yesterday endorsed a hydrocarbon sector modernization plan forwarded by energy minister Giorgos Stathakis, decided to keep the current licensing model unchanged – at least for the time being.

Exploratory drilling in Cyprus' EEZ to take place in July - SIGMA LIVE

06.04.2017 15:12

Exploratory drilling is set to take place in block 11 of Cyprus’ Exclusive Economic Zone (EEZ) in the first two weeks of July, a top Total official said, on Thursday.

Eleanor Rowley, Total’s VP of Exploration, MENA region, was addressing a ceremony, at the Presidential Palace, during which the contracts for exploration and production sharing for blocks 6 and 8 within Cyprus’ EEZ were signed.

“I’m happy to say that this will be the first test of the Zohr play in Cypriot waters. So we are very excited to operate this well along with our partners ENI,” she said.

Eni starts extraction of 200m cubic feet of gas per day from Zohr in October - DAILY NEWS EGYPT

Saturday February 25, 2017

Mohamed Adel

Company to rent a temporary gas processing plant until the completion of the permanent unit, says source

The Italian company Eni aims to begin pumping 200m cubic feet of gas per day from the deep-water Zohr field in the Mediterranean by October, through a temporary ground gas processing station.

A source at the Egyptian Natural Gas Holding Company (EGAS) told Daily News Egypt that Eni will rent a temporary station until it completes the establishment of the permanent treatment plant.

He added that Eni is set to complete the first phase of the treatment plant with a capacity of 650m cubic feet of gas per day by the end of 2017.

Post-Zohr reforms to boost appeal - ENERGY EGYPT / UPSTREAM ONLINE

February 11, 2017

With first production from Eni’s giant discovery likely to be less than a year away and other finds on the path to development, the country is taking the chance to revamp and streamline the bidding process.

Egypt’s upstream sector was given a much-­needed boost when Italian operator Eni discovered the ­giant Zohr field in the summer of 2015.

With first production from Zohr now likely to be less than a year away and other significant discoveries also on their way to production, there is a much more optimistic view of the country’s potential, despite the economic and political challenges it still faces.

Now, though, with Eni having attracted new investors to Zohr in the form of UK supermajor BP and Russian state-owned giant Rosneft, plus new acreage having been awarded from outstanding rounds, Egypt is pausing its licensing rounds in both the promising gas-prone Mediterranean Sea and the mature oil-bearing onshore areas.