Out of the Sea: Aphrodite Project Ties US Company to Cyprus Gas Field

(AP Photo/Petros Karadjias, FILE)

Cyprus’ government has reached a deal to revise the contract with US-based company Noble Energy and its joint venture partners, Israel’s Delek Group and Royal Dutch Shell to develop the Aphrodite gas field, Cyprus media reported. Hydrocarbons Company CEO Charles Ellinas told New Europe on May 31 the deal reached between Cyprus’ government and the Aphrodite gas field stakeholders to modify the Production Sharing Contract (PSC) means that Cyprus will be able to monetise Aphrodite. He stressed that in fact this one of the requirements of the deal.

The Cypriot government expects Noble Energy and its partners to expedite development. “It is expected that soon after the modified PSC is signed it will be followed by a gas sales agreement with Shell taking the gas by subsea pipeline to Egypt for liquefaction at the Idku LNG plant,” Ellinas said, referring to the Egyptian liquefied natural gas plant on the Mediterranean coast.

“However, this deal means altering profit sharing in favour of Noble Energy and its partners, leaving Cyprus with much reduced profits. The other drawback is that this will leave insufficient gas to support development of an LNG plant on the island for now,” Ellinas said, arguing that as a result, Glafcos and Calypso will have to wait until more discoveries are made. “Additional drilling, up to 8 wells, is planned to be carried out over the next 2 years. Hopefully this will lead to new discoveries bring plans for the development of an LNG plant at Vasilikos back to the table,” he said.

THE EXXONMOBIL PRESENCE

In late February, US energy giant ExxonMobil announced it has made a natural gas discovery offshore Cyprus in the Eastern Mediterranean at the Glafcos-1 well, which is located in Block 10. Based on preliminary interpretation of the well data, the discovery could represent an in-place natural gas resource of approximately 142 billion to 227 billion cubic metres.
Glaucus-1 was the second of a two-well drilling programme in Block 10. The first well, Delphyne-1, did not encounter commercial quantities of hydrocarbons.

The discovery will likely prompt further work on the Calypso field to the east, discovered by Italy’s ENI and France’s Total a year ago.

Cyprus Energy Minister Giorgos Lakkotrypis will reportedly brief parties on negotiations to grant ENI and Total the joint concession to explore offshore Block 7. Ellinas said the prospects for developing Block 7 are good. “Both ENI and Total are keen on this, particularly as part of the Calypso discovery in Block 6 extends into Block 7,” he said. However, he warned that with Turkey claiming that part of this block belongs to its continental shelf, any activity in the part of Block 7 claimed by Ankara will be contested, probably through naval ship harassment, and maybe more.

Meanwhile, Bloomberg reported on May 30 that Turkey is considering deploying a Russian missile-defense system along the country’s southern coast, near where its warships are accompanying vessels exploring for energy. According to the news agency, the long-range S-400 battery, which might be delivered in weeks, would dramatically enhance Turkey’s military capabilities in the Eastern Mediterranean, where it’s embroiled in a spat with EU-member Cyprus over offshore gas exploration.

Ellinas said if this happens it could threaten drilling offshore Cyprus. “It is a threat. Even though these may not be used in anger, their presence escalates risks in the region. I do not believe that the US will take any measures as long as ExxonMobil is able to carry on its drilling and development of Block 10,” he said.

Ellinas reminded that as Turkey has not made claims on this block, he expects this to be the case.

“With Turkey fully intending to support its claims through naval action if needed, the risks to drilling in blocks claimed by Turkey will be multiplied,” he said, arguing that the deployment of drilling rig Fatih about 60 kilometers west of Paphos and the aggressive statements by various Turkish officials, provide a clear demonstration of Ankara’s intention. “It is determined to support its claims aggressively. Response and condemnation by the international community so far has not been strong enough to deter Turkey,” Ellinas said, stressing that addition of the S-400s will make the situation even more difficult.

2 Comments

  1. Praise the lord, first the land of Cyprus were occupied by Nato members Turkey and British…and now the waters will be occupied by the Nato Oil barons and their U.S and Nato warships to protect their interests,not the people of Cyprus against threats from their neighbors!

    Listen to this guy Elinas , “Turkey could threaten drilling offshore Cyprus. “It is a threat”

    Elinas fails to mention the other threat from the people of Cyprus ..if TNH and Anastaiades ever tell them what the real threat and consequences to the entire Island country of Cyprus is!.

    Is TNH and Anastasiades going to protect the interest of the people of Cyprus and the most pristine beaches, waters, hotels, restaurants, sea and marine life and ocean front properties ,when your favorite Oil baron Exxon Mobil starts leaking thousands of gallons of oil each day into the waters of Cyprus , or when an accident destroy Cyprus entire livelihood!

    Their are states in America called Louisiana and Texas.whose coast lines were decimated by” one” oil rig 49 miles from their coast.which destroyed the fishing industry, tourist industry, hotel industry, restaurant industry, shrimp industry .to the tune of 29 billion dollars!

    Today., unlike the people of Cyprus, the people of America know the threats to their livelihoods and country by these oil factories in their waters, and legally do not allow the U.S. government and their Nato dictator Anastasiades in the waters of the Pacific or Atlantic Oceans!

  2. While the Glory to America interests fake news TNH publication …continues to write articles which only qualified bonafide white supremacist Aristocrats in our government and Cyprus are entitled to be heard ..it has not printed one of my letters to them ..simply ..asking ” Have the people of the coastal communities of the Island country of Cyprus …been advised of the dangers to their entire countries economy posed by Off shore oil drilling which include daily spilling of residual oil , navigational spilling of oil… accidental minor and major Adspills due to severe inclement weather, sabotage of pipe lines and oil tankers.which just occurred in the UAE!

    Additionally , if so, do the representatives and people object to this energy plan”

    Since ..they refuse to advise their readers in Greece and Cyprus of the wishes of the people of Cyprus …I can assume , and not surprised that Anastaisiades..the Nato dictator has not done any of what we in America have democratically done , which ban any oil rigs on her shores and have banned them!

    So .. TNH..why don’t you advise all the readers ..if the people of Cyprus see what the people of America see as the real threat to their lives being the U.S sixth fleet and their oil barons, who have demonstrated how they cooperate with Oil producing Countries and there people when they do not do as they say..Iraq,libya,Syria and now Iran, and Venezuela!

    Close U.S and Nato bases from Greece and Cyprus..just gangsters!

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