U.S. energy major Chevron Corporation CVX and the Republic of Cyprus have decided to hold discussions over the next four months to get a mutually beneficial deal that will ensure the Aphrodite gas field's development without further delays.
In order to go ahead with the project, the Chevron-led consortium has submitted an updated development plan to the Republic of Cyprus, hoping to avoid the termination of the project.
Chevron’s Interest in the Project
The Aphrodite gas field was discovered by Noble Energy in September 2011 and was appraised in 2013. The gas field is situated at a water depth of 1,700 meters in Block 12 offshore Cyprus. It lies 160 kilometers south of the city of Limassol and 30 kilometers toward the northwest of the Leviathan field, which is located in Israeli waters.
Chevron, the operator of the block, holds a 35% stake. Its partners in the block are Shell plc and NewMed Energy, holding a 35% and 30% stake, respectively.
After Chevron acquired Nobel Energy in 2020, it submitted a revised development plan to the Cyprus government, which was rejected in August 2024. Subsequently, a notice of breach was issued by Cyprus and the government also set a three-month deadline to advance the project and resolve the issues.
Overview of the Cyprus and Chevron Meeting for the Aphrodite Gas Field
In a joint press release, it was announced that productive meetings were held between George Papanastasiou, Minister of Energy, Commerce and Industry of the Republic of Cyprus, and Frank Cassulo, Chevron’s vice president of International E&P in Nicosia, regarding the Aphrodite project. It was decided that in the coming few months they will hold various discussions to reach a peaceful solution acceptable to both the parties.
The main focus of the government is to promote the projects to benefit the country while upholding the rights of the Republic. At the same time, both parties intend to focus on a common goal and path to succeed in such a complex project.
Under the updated plan, both parties agreed to build an 800-million cubic feet per day (MMcf/d) floating production unit with natural gas exported via a yet-to-be-built pipeline to the Egyptian gas transmission system. The Cyprus government also wants some of the gas from the Aphrodite field to be supplied to the local market and also support an LNG hub at the Vasilikos port, located between Limassol and Larnaca.
CVX’s Zacks Rank and Key Picks
Generating more than $200 billion in annual revenues and producing over three million barrels per day of oil equivalent,currently, CVX has a Zacks Rank #3 (Hold).
Investors interested in the energy sector might look at some better-ranked stocks like Royal Vopak VOPKY, VAALCO Energy EGY and Core Labs Inc. CLB. While Royal Vopak currently sports a Zacks Rank #1 (Strong Buy), VAALCO ENERGY and Core Labs carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Royal Vopak NV is a tank terminal operator. The company is engaged in the storage and handling of oil products, liquid chemicals, gases, biofuels and vegetable oils. The Zacks Consensus Estimate for VOPKY's 2024 earnings indicates 2.5% year-over-year growth.
VAALCO Energy is an independent energy company principally engaged in the acquisition, exploration, development and production of crude oil and natural gas. The Zacks Consensus Estimate for EGY’s 2024 earnings indicates 4.8% year-over-year growth.
Founded in 1936, Amsterdam, Netherlands-based Core Labs Inc. is an oilfield services company operating in more than 50 countries. CLB’s expected earnings per share growth rate for three to five years is currently 22.2%, which compares favorably with the industry's growth rate of 1.5%.
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