Israel and Cyprus reach agreement on marine gas reserves

Israel and Cyprus have reached an understanding over gas reserves that straddle their maritime border, the Cypriot energy minister said on Tuesday March 9th. It was seen as a significant move towards resolving a disagreement over offshore spoils that stretched back to 2011.

Development of the Aphrodite gas field in Cypriot waters had been held up because a small part of it was part of Israel’s maritime zone and another gasfield there. The Cypriot field was first discovered in 2011.

Cypriot energy minister Natasa Pilides said she and her Israeli counterpart Yuval Steinitz had agreed upon a framework to resolve the issue, and guidelines would be passed on to the companies involved in the project.

“The framework will be set out in a joint letter which is being prepared. We are both very satisfied we are now at this point after nine years of discussion,” Pilides told reporters.

Steinitz, who was in Cyprus to sign a memorandum of understanding on another project, said that there was a ‘fair chance’ of an eventual resolution. “Nothing is certain, but there is a good chance that this might lead us to a solution of this little but significant obstacle in the wonderful relations and cooperation between Cyprus and Israel on energy and on many other issues,” he told Cyprus News Agency.

In 2019 Cyprus signed a 25-year concession with Noble Energy, Shell and Delek Drilling for exploitation of the Aphrodite field. Israel had maintained an agreement was required before work started because part of Aphrodite overlapped on to the Israeli side.

Companies on the Cypriot side would enter talks with those on the Israeli side to resolve how the Israeli companies would be compensated, Steinitz’s office said.

If the companies did not reach agreement within 180 days it would be referred to an international expert who would try to resolve it for another 180 days.

Should there be no agreement by then, the issue would return to a state level.

The Aphrodite field holds an estimated 4.1 trillion cubic feet of gas. At stake was about 10% of the deposit, which is a fraction of the gas already discovered in Israel. Meanwhile, on March 8th Cyprus, Israel and Greece signed an agreement to create a subsea power cable which will cross the Mediterranean and link their electricity grids