Chevron Corporation CVX will begin a detailed seabed survey in the Eastern Mediterranean this summer, marking the first step toward constructing a crucial pipeline linking Cyprus’ Aphrodite natural gas field to processing facilities in Egypt. The announcement was made after a discussion between the company and the Cypriot president held in Houston. The discussion also supported the processing of the survey in accordance with a predefined timetable.
The pipeline is designed to transport gas from the Aphrodite gas field to an undisclosed Egyptian facility. This strategic infrastructure will support energy demand in neighboring regions and the European Union, positioning Cyprus as a key supplier in the region.
For Chevron, the Aphrodite project is an important part of its diversified portfolio spanning across the eastern Mediterranean region and is part of Chevron’s plans. It is the only U.S.-based energy company that operates in Cyprus, Israel, Egypt and Greece.
The Aphrodite gas field was discovered by Noble Energy in September 2011 during the drilling of the A-1 well. The discovery was later appraised with the A-2 well in 2013. The gas field is situated in Block 12 offshore Cyprus at water depths of 1,700 meters. It lies 160 km south of the city of Limassol and 30 kilometers toward the northwest of the Leviathan field, which is located in Israeli waters. The field is estimated to contain up to 4.5 trillion cubic feet of natural gas.
Chevron, currently carrying a Zacks Rank #3 (Hold), is the operator of the block, holding a 35% stake. Its partners in the block are Shell plc and NewMed Energy, holding a 35% and 30% stake, respectively. In November 2019, the government of Cyprus granted the partners in Block 12 a production license valid for 25 years, with a provision to extend it for an additional 10 years.
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In February, Chevron and its partners reached a framework agreement with Egypt to guide the development of the Aphrodite gas field. This followed the approval of a revised production plan by the Cypriot government and the Chevron-led consortium, which includes the construction of a floating production platform and a pipeline to transport the gas to Egypt.
While Chevron leads Aphrodite’s development, other energy majors are also exploring Cypriot waters. Exxon Mobil Corporation XOM and Qatar Petroleum are actively drilling, while Eni S.p.A. E and TotalEnergies SE TTE have discovered the Cronos deposit, estimated to contain over 3 trillion cubic feet of gas.
The Cyprus Energy Minister has also hinted at potential collaboration among ExxonMobil, Eni, and TotalEnergies to jointly develop nearby fields, suggesting a broader cooperative energy landscape emerging in the Eastern Mediterranean.
ExxonMobil's bellwether status in the energy space and optimal capital structure have historically produced industry-leading returns, making it a relatively lower-risk energy sector play. With the acquisition and integration of Pioneer in its upstream portfolio, the majority of XOM’s total production is expected to be generated by the combined advantaged assets of Permian, Guyana, and LNG by 2030. Notably, ExxonMobil’s strong presence in the Permian Basin has resulted in strong growth in its production levels, which are expected to double by 2030.
Eni SpA, based in Rome, Italy, is among the leading integrated energy players in the world. E’s upstream operations include the exploitation and production of oil and natural gas resources. Through its midstream activities, Eni transports and stores hydrocarbons.
France-based TotalEnergies is among the top five publicly traded global integrated oil and gas companies based on production volumes, proved reserves and market capitalization. TTE has operations in more than 130 countries across five continents.
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