Chevron takes another shot at making Aphrodite rise from the sea with revised $4 billion plan for offshore gas development

Chevron Cyprus Limited, a subsidiary of the U.S.-headquartered oil major Chevron, and its partners have handed over an updated plan for the development of an offshore gas field reservoir in Block 12 to the government of Cyprus, located in the Eastern Basin of the Mediterranean Sea.

The Aphrodite discovery, originally made in the A-1 well in September 2011, was appraised with the A-2 appraisal well in 2013, confirming approximately 98 billion cubic meters of gas (bcm) of contingent resources with a potential for an additional 26 bcm of prospective resources. The government of Cyprus granted the partners in Block 12 a production license for 25 years in November 2019.

At the time, an option to extend the term by another ten years was also given, alongside the green light of an outline for the reservoir development. While Chevron operates the block with a 35% interest, Shell (35%) and NewMed Energy (30%) are the firm’s partners. Situated 160 km south of Limassol and 30 km northwest of the Leviathan field, the Aphrodite field reservoir is in the Cypriot Exclusive Economic Zone (EEZ) where the sea depth reaches 1,700 meters.

Chevron worked on the final optimization details for the Aphrodite field’s development concept in July 2022, through possible synergies with other facilities. A few months later, the U.S. oil major confirmed plans to move forward with the field development, planning to invest about $192 million to drill a new well and to cover development costs for the project.

Afterward, the company submitted an updated development plan for the project in May 2023, which the country’s government shot down in August 2023, however, the operator and its partners in the Aphrodite reservoir were invited to continue the discussions on the matter in early September 2023.

Chevron submitted another updated Aphrodite field development plan for approval to the government of Cyprus on August 30, 2024. The firm’s estimated cost of the revised plan was reported to be about $4 billion before technical-economic feasibility studies and the performance of the front-end engineering design (FEED).

The revamped development and production plan outlines that the production and processing of natural gas from the field will be accomplished initially through four production wells connected to a floating production unit (FPU) positioned over the field, with a nominal maximum production capacity of around 800 million cubic feet per day.

The natural gas from the project is envisioned to be exported from the floating production unit via a pipeline to the Egyptian transmission system. Chevron’s partner, NewMed Energy, explains there is no certainty as to whether, when, or if at all, the government of Cyprus will approve the submitted plan, and whether the approval will be contingent on any conditions.

Aside from the go-ahead from the country’s government, the final investment decision (FID) for implementing the updated development and production plan is subject to FEED execution, commercial arrangements associated with the to-be-installed export pipeline, the signing of agreements for the supply of natural gas and fulfillment of the closing conditions, regulatory approvals, and financing arrangements.

Other oil and gas players are also pursuing energy projects offshore Cyprus, as confirmed by Eni and TotalEnergies, which are working on a full evaluation of the hydrocarbon resources in the Cronos gas discovery to come up with a development solution to boost the supply of gas not just in the region but also to Europe.

On the other hand, the country’s liquefied natural gas (LNG) import terminal project is under investigation by the European Public Prosecutor’s Office (EPPO) in Nicosia due to alleged procurement fraud, misappropriation of European Union (EU) funds, and corruption.