IO Monthly Update - May 2018
Industry Updates
  • Sources Say Cyprus Decided to Proceed with Aphrodite Export Without Reaching Understandings with Israel
The Marker reported on 25 May 2018 that sources suggest that Cyprus has decided to allow further progress in talks regarding export of gas to Egypt from the Cypriot offshore Aphrodite gas field, despite the absence of an agreement with Israel regarding the adjacent Ishai lease in the Israeli exclusive waters. Ishai would be depleted if gas is recovered from Aphrodite. This, despite statements by Israeli Energy Minister Yuval Steinitz earlier this month, according to which Israel insists on at least 5% of Aphrodite, and that the dispute pertains solely to the manner in which the rights of the Israeli side be assured. According to The Marker, the Israeli Minister presented this stand in the trilateral discussion with Greek and Cypriot Energy Ministers in early May, and estimated that the dispute would be solved within the next 3-6 months. Reuters added on 7 May 2018, that this "ownership squabble … is threatening to delay multi-billion dollar plans to turn the eastern Mediterranean into a major energy hub."

  • Israeli Energy Minister Promotes Israel-Cyprus-Greek Pipeline Agreement

Bizportal reported on 8 May 2018 that the three energy ministers have met that day in Cyprus, and discussed the signing of a trilateral agreement for the ambitious project, aiming to connect the eastern Mediterranean gas discoveries with continental Europe. The pipeline is planned to stretch for about 2,100 km, with an estimated cost of about NIS 25 billion (about €6 billion). Bizportal adds that if the project gets the approvals, it should be finished by 2025, and would ensure Israeli and Cypriot gas export to Greece and other European markets, as well as strengthen European energy security and diversify its energy sources.
Regional Events
  • French "Total" Seeking to Expand Its Cyprus Activities
According to the Daily Mail report on 21 May 2018, Total is looking to expand its exploration activities offshore Cyprus, as it applied for another exploration license in south Cyprus' economic waters called Block 8, where Italian ENI was already granted a license. According to the report, the statement was made days after Total has warned it may exit Iran over renewed U.S. sanctions there. The Daily Mail further stated that Cypriot Energy Minister Yiorgos Lakkotrypis regarded this step as an important signal, showing that international companies are not deterred by Turkish efforts to hinder activities in southern Cyprus waters, as it comes only three months after Turkish war ships blocked drilling by ENI in nearby Block 3.

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