Discussions on “Aphrodite” development restart

28 January 2016
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The Ministry of Energy and partners in Block 12 of Cyprus’ Exclusive Economic Zone (EEZ), are set to restart their discussions on the development and production plan of the Aphrodite field after signing an agreement for the entry of BG with a 35% share in the block’s partnership on Wednesday.

Amid “difficult times” for the industry of hydrocarbons, due to the drop of international crude oil prices, the Minister of Energy Yiorgos Lakkotrypis said that the agreement was “a very important development”.

“We see now that the consortium has strengthened both technically and economically, and also that the interests in the natural gas production chain are now aligned, since the newcomer on BG is co-owner and manager of the LNG terminal in Idku,” the Minister said.

He also said that in the coming days parties intend to “restart the debate on the project development and production, hoping to lead us to an agreed plan to start the development of the Aphrodite field”.

He also said that today`s agreements are a positive step towards the Cypriot gas export to BG`s LNG plant in Idku Egypt. However, there should first be the trade agreements, on which, as the Minister said, they should be focusing in the coming weeks.

As industry sources have said, the biggest challenge for the export of Cypriot gas in Egypt is the fall in international oil prices, which have also pushed down and the price of natural gas which are not expected to recover within the coming years.

The same sources said that the export of Cyprus` natural gas in the liquefaction terminal of BG in Egypt is not necessarily linked to the transport of natural gas from the Israeli Leviathan, although Noble, Delek and Avner are also partners in the Israeli field.

On behalf of Noble Energy, Director of Business Unit Cyprus Barry Shelden welcomed BG to the Block 12 partnership and to Cyprus, saying that BG brings tremendous level of experience in the technical and financial field and also marketing that “I think will be a real benefit to the Block 12 partnership”.

“We believe this is a very important step in allowing us to move forward with continued work, to develop the Aphrodite field along with the Ministry of Energy,” he said.

On behalf of BG Group, Vice President of Global Business Development Jim Seaton said the company was looking forward to working with the Government of Cyprus and their new joint venture partners Noble, Delek and Avner in the successful development of Aphrodite field.

Referring to Shell`s BG takeover and how this affects plans for Cyprus and the region, Seaton said that BG shareholders vote tomorrow.

“So we will have to wait until then. Should the deal go ahead, BG Cyprus would be part of the Shell group. But in terms of Shell`s intentions I couldn`t speculate. I can`t speculate on Shell’s intention in the region,” he said.

Lakkotrypis noted that the agreement was signed with BG regardless of any other developments, such as the takeover of BG by Shell, adding that they would wait to see the shareholders decision and after that, the terms of a possible merger.

The Republic of Cyprus, Noble Energy International Ltd, Delek Drilling Limited Partnership, Avner Oil Exploration Limited Partnership and BG Cyprus Limited, signedan agreement for the assignment to BG Cyprus Limited of 35% of the interest arising from the Hydrocarbon Exploration Licence in Block 12 of the Exclusive Economic Zone of Cyprus, which includes the Aphrodite natural gas discovery on Wednesday .

The assignment of rights to BG Cyprus Limited was approved by the Council of Ministers on the 18th of January 2016. On the basis of the agreement signed today, Noble Energy will maintain operatorship of Block 12 with a 35% interest arising from the Hydrocarbon Exploration Licence, while Delek Drilling and Avner Oil Exploration hold 15% each.

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