Cyprus and Israel back at the table over “Aphrodite”: new round of talks next week

Cyprus and Israel will hold a new round of online talks next week in an effort to reach an agreement on the cross-border gas reservoir between Cyprus’s Aphrodite field and Israel’s Yishai field, according to the Cyprus News Agency (reported by the Cyprus Mail on October 9).

Where the problem lies

The dispute exists because Aphrodite extends geologically across the maritime boundary into Yishai, which lies in Israel’s exclusive economic zone. Aphrodite is in Block 12 of the Cypriot EEZ, at its southernmost tip, which borders the Israeli zone to the south-east. The operator is the US company Chevron.

The talks have been going on for years. Israel argues that part of the gas in Aphrodite comes from Yishai, with estimates suggesting that up to 10% of the field could be Israeli. That would put more than €1 billion at stake. Energy Minister Michael Damianos had said in September that the meetings would take place in the first half of October.

The investment decision and Egypt

Once an agreement is reached, the government expects the consortium of Chevron, Israel’s NewMed Energy and BG Group, which is owned by Shell, to take a final investment decision on Block 12 within the next year. In September President Nikos Christodoulides met Chevron executive Javier la Rosa and called the project a matter of “strategic priority”.

The discussions also cover the use of Egyptian infrastructure. Surveys for a pipeline to the Segas liquefied natural gas terminal in Damietta began in June last year. Under this plan, Aphrodite gas would be liquefied in Egypt and exported as LNG, mainly to Europe.

Why it matters

Aphrodite was the first field discovered in the Cypriot EEZ, in 2011, and remains the most mature for development. An agreement with Israel would close one of the last open issues before the investment decision and give Nicosia its first production project. The significance is also geopolitical. Turkey does not recognise the Cypriot EEZ and has in the past challenged exploration in Cypriot blocks in practice, while Cyprus uses its energy cooperation with Israel, Egypt and American companies to underpin its sovereign rights.