Israel and Cyprus disagree over Aphrodite Gas Field

A disagreement over the ownership rights to the Aphrodite natural gas field in Cyprus is delaying billion-dollar plans to turn the eastern Mediterranean area into a larger energy hub. Aphrodite is located along the edge of Cyprus’ economic waters. One of its tips stretches across Cyprus’ border into Israel’s maritime zone. According to a recent estimate in Israel, there are as much as 10 billion cubic meters of gas worth close to $1.5 billion at stake. However, this amount is less than 10% of Aphrodite’s total reserves. Israel has said that it will not give up on this gas and that companies operating on the Israeli side are ready for legal action if Aphrodite is developed without them.

Prime Minister Benjamin Netanyahu and Energy Minister Yuval Steinitz have flown to Cyprus to discuss plans to join the two countries’ electricity grids and build a pipeline to supply Mainland Europe with their gas fields. Energy Minister Steinitz has said that he was optimistic that the dispute will be solved within six months and that the governments have asked the companies to reach an agreement among themselves on how much gas is located on each side’s economic waters. If the dispute is not resolved within a specified period, they will turn to an international expert, not an arbitrator. Cyprus’ Energy Minister Yiorgos Lakkotrypis has suggested a similar course of action.

Developing the Aphrodite natural gas field are Royal Dutch Shell, Texas-based Noble Energy, and Israel’s Delek Drilling. These companies are looking to sell the gas domestically and abroad, with a focus on Egypt, where Shell has a liquefaction plant. The Aphrodite partners would not comment on the dispute, though a footnote in Delek’s 2017 financial report stated that “the vast majority” of gas was in Cyprus and a “minority” was in the adjacent Yishai prospect on the Israeli side. The Yishai consortium, which includes energy firm Israel Opportunity and Nammax Oil and Gas has already spent $120 million on exploratory drilling. The field is also meant to be a link in the 2,000-kilometer pipeline being planned by IGI Poseidon, a joint venture between Greece’s natural gas firm DEPA and Italian energy group Edison, to carry Israeli and Cypriot gas to western Greece. A final investment decision on the pipeline, with an expected price tag of up to 6 billion euros ($7.2 billion), could come about next year.

While negotiations still continue over the Aphrodite natural gas field, there are numerous Israeli startups trying to minimize Israeli’s dependence on fossil fuel energy sources. Israel is not yet seen as the market leader in fossil fuel alternative research in the world, as they are in water or cyber technologies. But in each related niche, like solar energy, battery technologies and electric car components there is tremendous respect for Israeli companies. With deregulated markets where consumers can compare and choose their energy suppliers, electricity comparison sites are gaining popularity. BrightSource built the world’s largest solar electricity generation installation, in California, using nanoparticle coatings developed at the Hebrew University of Jerusalem. Ormat built one of the world’s first solar-power fields, near the Dead Sea, and is a leading geothermal and recovered-energy generation producer. Despite our obsession with fossil fuels, humanity is finding new and creative ways to reduce our usage and dependence on these fuels.


About the Author
Frank Coutinho is passionate about business and entrepreneurship. After studying Business Management at university he started his own e-commerce company. He enjoys reading the daily business news, especially news on startups and the technology industry. In his free time, Frank enjoys reading, soccer, hiking, and watching documentaries.
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