The "Aphrodite" project, named after the ancient Greek goddess of love and beauty, has emerged as a central point of contention between the government and the American energy behemoth, Chevron. As both sides staunchly defend their contrasting views, the recent round of negotiations has reached a conspicuous stalemate.

Based on insider information, the Ministry of Energy's outright dismissal of Chevron's latest revised development proposal for "Aphrodite" has heightened the existing tensions. The unresolved disputes cast doubts on the future of a venture that once promised to be a cornerstone for the nation's energy infrastructure.

The Minister of Energy now stands at the crossroads, holding the decisive power in this diplomatic standoff. Should Chevron not adhere to the previously settled terms, the Ministry possesses the authority to annul the contract, a decision that could send shockwaves throughout the global energy market.

A source, speaking to Bloomberg under anonymity, commented, "The political intricacies surrounding the project have further complicated the dialogue. Chevron's approach, marked by an influx of varied proposals, seems more like a stalling tactic rather than a genuine effort to expedite the project."

Beyond its energy implications, the "Aphrodite" project symbolizes the intricate dance of diplomacy and trade ties between governments and global corporations. As the energy community, stakeholders, and the world at large await the next developments, the hope is for a balanced resolution that ensures the initiative's fruition.

Negotiations between the Ministry of Energy and the American company Chevron regarding the development plan of the "Aphrodite" deposit are heading towards a total breakdown which might be irreparable.

There's a risk of further precious time being lost, with all that this implies for the Aphrodite development. The revised plan, which the company submitted a few months ago and includes the creation of an underwater pipeline to Egypt without the installation of a floating unit FPU, was rejected by our side, as it was putting the Republic of Cyprus in a difficult position.

The Republic is faced with either accepting the company's revised plan as it is or looking for alternative solutions, including the possibility of finding a operator or some sort of a new solution to bring together key stakeholders. The deadline set for reaching a mutual agreement between the two sides expires in less than two weeks (on November 5th) while both sides remain steadfast in their positions with a non-willingness to concede terms to get to a solution favored by either side.

Our side considers the installation of the floating natural gas processing platform on the source within the Cypriot EEZ as essential because, as the Minister of Energy Giorgos Papanastasiou has repeatedly mentioned, the FPU installation will give our side the advantage to process and channel pure natural gas to the markets. On the contrary, the absence of the floating platform and the processing of the gas in Egypt itself, as proposed by Chevron, entails risks of dependency and exploitation of the "Aphrodite" gas by Egypt itself, leaving Cyprus tied up.

The companies want what they want and might be right for their shareholders but that doesn’t make Cyprus wrong for standing up for what the Country and its people need so as to have an energy development take place It is logical for the company to seek a reduction in costs, which, with the creation of FPU facilities in the EEZ of the Republic of Cyprus, is expected to increase by about one billion euros.

Mr. Papanastasiou, speaking at a press conference last Saturday in front of several journalists, stressed that since we don't have infrastructure, no matter how much gas we find, it's as if we have nothing until it can be developed.

According to Mr. Papanastasiou, Chevron has proposed in its revised plan the creation of an underwater gas transport pipeline 400 kilometers long to Egypt without the floating platform, which will go to the WDDM facilities, which also belong to Shell. From there, it will be transferred to the IDKU liquefaction station in Egypt. "Both in Israel and in Egypt there are infrastructures, the only country with confirmed natural gas deposits that doesn't have infrastructure is Cyprus."

"We have nothing if we don't have infrastructure. Therefore, with our FPU, we are offered flexibility to send natural gas in other directions since it will be processed within the Cypriot EEZ and not in Egypt. Without the FPU, we don't have control, Egypt will have it since they have such infrastructures," he said, among other things. Alongside the floating platform FPU, Mr. Papanastasiou said, we will be able to bring natural gas to Vasilikos ourselves, while he emphasized that with the creation of a floating platform, the recovery of quantities will be greater.

Speaking further with experienced industrial and political analysts it is clear especially with whats happening in Israel that Cyprus needs to start developing its own infrastructure for export optionality. The last thing anyone should want is to OK a plan for now that ends up at the mercy of geopolitical events later for not having independence of having infrastructure also to an extent in Cyprus.

Papanastasiou admitted that our side faces many difficulties in the discussions with Chevron. However, as he said, based on the contract, the final decision rests with the Minister of Energy of the Republic of Cyprus. That is, if the company does not accept the final decision, the minister will take the decision and he is a well known strong supporter of the creation of a floating platform FPU in "Aphrodite". "The advice we have from the hydrocarbon service, the Hydrocarbon Company of Cyprus (EYK) and our French consultants, is that we should insist on the direction of creating the FPU," Mr. Papanastasiou stated.

TERMINATION OF THE CONTRACT BASED ON THE CONTRACT, THERE ARE SCHEDULED MILESTONES COMING UP FOR THE "APHRODITE" DEVELOPMENT.

In November a FEED study must begin. If the company does not start, there will be a three-month warning given that triggers a “remedy period”, and if it still doesn't rectify the situation, the Ministerial Council can terminate the contract.

In such a case, we need to find a new operator/partner, with implications for the time horizon of exploiting the offshore field. On the other hand, there is also the scenario where the field could be sold to another company. "The positive thing is that 'Aphrodite' is ready for development, so a company might be interested and develop it immediately. Of course, our goal is not to give it to another company. Such decisions are not simple. We need to do a technical, geopolitical analysis.

The area is boiling over for a multitude of reasons, but we want and must insist on the minimum required infrastructure that safeguards Cyprus. As long as we have quantities at the bottom of the sea without infrastructure, it's like we have nothing," reiterated the competent minister.

CYPRUS PROBLEM A THORNY ISSUE - Questions arise regarding Chevron's proposed construction of an underwater pipeline of more than 400 kilometers towards the WDDM facilities in Egypt, managed by Chevron, and not the construction of a pipeline of about 100 kilometers to the existing Leviathan infrastructures, also managed by the American company, channeling gas through pipelines to Egypt.

The above question was also posed to Chevron itself, said Mr. Papanastasiou, but we did not receive a clear answer. Well-informed sources told "P" that as long as there is a Turkey political problem in the middle, the American company might be hesitant to make any move and proposes various proposals that only cause delays. A diplomatic source also pointed out to the newspaper that within the Ministry of Energy of Israel, there are two different schools of thought regarding part of the gas in the Cypriot and Israeli EEZ. One school promotes and pushes for Turkey's inclusion in the energy planning in the Eastern Mediterranean, and the other wants the gas to be channeled through Cyprus. However with what is currently going on in Israel who knows where political relations will land. As is becoming clearer – if things land badly for Israels relations with Neighbours then Israel and its allies will increasingly need Cyprus to play a hub role in the region to counterbalance the risk of political relations being damaged possibly irreversibly as a result of this war.