Energy Ministry Yuval Steinitz told Cypriot leaders Tuesday that Israel is demanding 5% or more of the production from the joint Aphrodite-Yishai natural- gas field in disputed Mediterranean waters, sources told TheMarker.
Steinitz, who attended the meeting in Nicosia with Prime Minister Benjamin Netanyahu, said afterward in public that the dispute could be settled within six months but did not elaborate on Israel’s position.
“The professional opinion of the [Israeli] government is that at least 5% of the reservoir is Israeli,” said an Israeli official who asked not to be named. “The dispute with the Cypriots is about how the Israeli share will be guaranteed because it’s the Cypriots who will be developing the field.”
The countries are at odds over Aphrodite, a gas field discovered in 2011 at the edge of Cyprus’ economic waters. One tip of it stretches into Israel’s maritime zone. Pumping gas from Aphrodite could reduce the amount of gas available to Israel in its adjacent Yishai field.
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At stake is up to 10 billion cubic meters of gas worth nearly $1.5 billion, according to one recent Israeli estimate.
The Yishai partners — including energy firm Israel Opportunity and Nammax, a company linked to billionaire Beny Steinmetz — claim an even bigger share. They have already spent $120 million on exploratory drilling.
“According to Energy Ministry figures, Yishai constitutes at least 10% of the Aphrodite reserve. All future development has to been in accordance with that and to ensure our complete share and all the rights Israel and the partnership have,” a spokesman said.
If Israel and Cyprus don’t reach an understanding within a few months, they will hire an international expert to propose a solution based on the two reservoirs’ estimated reserves. For Aphrodite, those range between 110 and 120 billion cubic meters, while Yishai is believed to contain from 7 to 10 bcm.
Ironically, Israel has a stake in both sides of the dispute: The Aphrodite consortium includes not only Royal Dutch Shell and Texas-based Noble Energy, but Israel’s Delek Drilling, which is controlled by Yitzhak Tshuva.
Cyprus regarded Aphrodite as a critical national asset that could provide it with badly needed revenues. With the price of natural gas in Europe, the market for the gas, rising in the last year to $7.80 per British thermal unit, the government has an interest in concuding an agreement as quickly as possible so that development can begin.