**Negotiations with Israel over Natural Gas Dispute at ‘Very Advanced Stage’**
Negotiations between the governments of Cyprus and Israel concerning the rights to natural gas reserves beneath the eastern Mediterranean seabed are reportedly at a “very advanced stage,” according to Cyprus' Energy Minister Michael Damianos. Speaking on Tuesday, Damianos revealed that a productive meeting had taken place the previous day, during which significant commercial terms were established. However, he noted that some legal matters still require resolution.
The discussions primarily revolve around the Aphrodite gas field, located in Block 12 of Cyprus’ exclusive economic zone (EEZ). This block is situated at the southernmost point of Cyprus' EEZ and shares a border with the Israeli EEZ to the southeast. The Aphrodite field, which is positioned in the eastern part of Block 12, has been a point of contention between the two nations due to overlapping claims.
Israel has long contended that a portion of the gas within the Aphrodite field may originate from the adjacent Yishai field in its own EEZ. Estimates suggest that up to 10 percent of the Aphrodite field could be Israeli territory, which translates to a potential financial stake of over €1 billion.
Damianos’ predecessor, George Papanastasiou, indicated as early as January of the previous year that negotiations were nearing their conclusion, expressing optimism about reaching an agreement by the end of April 2022. He emphasized the intention to visit Israel to finalize and sign the agreement. However, various geopolitical events, including a conflict between Israel and Iran last summer and subsequent tensions involving the United States, have shifted focus away from the negotiations.
Despite these challenges, Damianos expressed confidence in the ongoing discussions. He stated that the Cypriot government anticipates that following an agreement with Israel, a consortium comprising American multinational Chevron, Israeli energy company NewMed Energy, and BG Group (owned by Royal Dutch Shell) will finalize an investment decision regarding Block 12 in the coming year.
In June of the previous year, seabed surveys commenced to identify a suitable location for a pipeline that will transport natural gas from Cyprus’ EEZ to Egypt for liquefaction. The initial objective is to channel gas from the Aphrodite field to the Segas liquefied natural gas (LNG) terminal located in the Egyptian port city of Damietta.
As negotiations progress, both Cyprus and Israel are poised to benefit from the potential economic gains associated with the development of these natural gas reserves, which are crucial for energy security and economic growth in the region. The outcome of these discussions will likely have significant implications for energy dynamics in the eastern Mediterranean.