Monday, 18 November 2019

Cyprus signs $9 billion natural gas deal

Image credit: PA

NICOSIA: Cyprus announced it had signed its first natural gas exploitation deal worth $9.3 billion with a consortium comprised of industry giant Shell, US-based Noble and Israel´s Delek.

“Noble Energy, Shell and Delek now have in their hands the first exploitation license granted by the Republic of Cyprus so they can commercialise the deposit,” said Energy Minister George Lakkotrypis, shortly after the agreement was signed.

The 25-year license is for the Aphrodite gas field, the first to be discovered off Cyprus, by Texas-based Noble Energy, in 2011. It is estimated to contain over four trillion cubic feet (over 113 billion cubic metres) of gas.

The signing of the deal comes after the cabinet approved revisions to a production sharing agreement, made at the companies´ request due to a significant fall in hydrocarbon prices since mid-2014.

The re-working of the production contract means Nicosia is set to receive an average yearly income of $520 million over an 18-year period.

Lakkotrypis said that under the new deal, the consortium is obliged to keep to a tight deadline to begin extracting the gas reserves — and generating revenues — by 2025.

In February, ExxonMobil and Qatar Petroleum discovered an even bigger natural gas reserve off the coast of Cyprus, holding an estimated five to eight trillion cubic feet.

Italy´s ENI and Total of France are also heavily involved in exploring for oil and gas off Cyprus.

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