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Progress on Israel-Cypriot gas dispute

Israel and Cyprus are advancing steps to resolve their dispute over the offshore Aphrodite natural gas field in the Eastern Mediterranean Sea.

While the two countries hold warm bilateral relations and belong to a regional energy triangle with Greece, there has been an outstanding issue for the past 9 years over the gas field that straddles their maritime border.

Aphrodite, which was discovered in 2011 off Cyprus’ southern coast in Drilling Block 12, is estimated to holds about 4.1 trillion cubic feet of gas. About 10% of the deposit, valued at some $1.5 billion, overlaps into Israel’s adjacent Yishai reserve.

Cyprus signed a 25-year concession with Noble Energy, Shell and Delek Drilling for exploitation of Aphrodite in 2019, but development has been held up because pumping could drain resources from Yishai.

Cypriot Energy Minister Natasa Pilides announced that she and her Israeli counterpart Yuval Steinitz have agreed upon a framework to resolve the matter.

“The framework will be set out in a joint letter which is being prepared. We are both very satisfied we are now at this point after 9 years of discussion,” she said.

Israeli Energy Minister Steinitz, who was in Nicosia to sign a memorandum of understanding with Cyprus and Greece on the EuroAsia Interconnector subsea cable to link the 3 nations’ electrical grids, also commented on the development. “Nothing is certain, but there is a good chance that this might lead us to a solution of this little but significant obstacle in the wonderful relations and cooperation between Cyprus and Israel on energy and on many other issues,” he was cited as saying by the semi-official Cyprus News Agency as he prepared to depart the island.

The Israeli Ministry of Energy released a statement saying that the framework entails discussion on adequate compensation by companies representing Nicosia with Jerusalem officials. Should they fail to reach agreement within 180 days, the matter would then be transferred to an international arbiter for the same time period; after which efforts would be returned to the state level if resolution has not yet been achieved.