Econostrum | Economic News in the Mediterranean

Cyprus' Aphrodite gas field secures financing for its first drilling

Written by Frédéric Dubessy on Tuesday, September 20th 2022 à 11:20 | Read 2398 times

Cyprus' Aphrodite gas field obtains financing for its first drilling
Cyprus' Aphrodite gas field obtains financing for its first drilling
CYPRUS. The partners gathered in the Israeli company NewMed Energy announced, on Sunday 18 September 2022, the approval of a first investment of 192 M$. This sum will allow drilling to begin as well as cover other costs of the offshore project located off the Mediterranean island of Cyprus, 170 km south of Limassol.

The majority of the funding will be used to drill one well. It will confirm the promising size of this deposit, estimated during the explorations at 124 billion cubic meters of gas. Then, this well will be used for production. According to NewMed Energy, which has obtained a production license for twenty-five years with an option to extend it for a further ten years, drilling should begin in the first half of 2023.

The consortium, formerly Delek Drilling (a subsidiary of Delek) created in 1993, holds a 30% stake in Aphrodite. The rest is divided equally (35% each) between the American Chevron and the Anglo-Dutch Shell. The first investigations took place after the Cypriot government granted exploration permits in its territorial waters and led to the discovery of Aphrodite in 2011. More were granted in February 2016.

Block 12 is the most promising of the Cypriot blocks (map: NewMed Energy)
Block 12 is the most promising of the Cypriot blocks (map: NewMed Energy)

A delivery to the Western Balkans?

The future of this field, once in production, remains under discussion between the various partners and the Cypriot government. Two options exist. The first is to connect Aphrodite to existing facilities in the region, mainly by building a common transmission infrastructure with the Israeli field. NewMed Energy also owns 45.34% of the Israeli Leviatan field, the largest in the Eastern Mediterranean. The second plans to link it to the development plans of nearby assets in Egypt, thus of already existing or planned facilities.

In October 2021, Cairo, Athens and Limassol signed, during the Eastern Mediterranean Gas Forum (EMGF) in the Greek capital, an agreement for "cooperation in the exploration and transfer of natural gas", described by its promoters as "a catalyst for stability in the region". Abdel Fattah al-Sissi said at the time, "it is perhaps crucial that we all strive to take advantage of this momentum to give a parallel impetus to the project to build an offshore pipeline to transport natural gas from the Cypriot field "Aphrodite" to the two Egyptian liquefaction stations of Damietta and Idku. The Egyptian president said that this possibility would open "the way for the possible supply of liquefied gas from Egypt to Greece (....) and the door to supply the countries of the Eastern Mediterranean, and perhaps also the countries of the Western Balkans and Central Europe.


​Fields coveted by Turkey

Cypriot natural gas should supply the domestic market of Cyprus and allow the energy independence of the country, member of the European Union. It could also be exported, via pipeline, to neighbouring countries, notably Egypt.

Aphrodite was the first discovery in Cyprus' Exclusive Economic Zone (EEZ) in September 2011 with the drilling of the A-1 well. In 2013, the A-2 well confirmed the enormous potential of this field. This is stirring up covetousness. The borders of this region are disputed by Turkey, which also claims this area and has repeatedly sent an exploration vessel, the Oruç Reis, off the Mediterranean island and Greece. Ankara intends that the potential deposits also benefit the Turkish Republic of Northern Cyprus (TRNC), recognized only by Turkey.

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