WHAT ARE THE REASONS AND THE CONSEQUENCES OF POSTPONING AN ALREADY AGREED GAS “DEVELOPMENT AND PRODUCTION PLAN” FOR A LONG PERIOD OF TIME? THE “APHRODITE” RESERVE CASE (REPUBLIC OF CYPRUS)

Petros Damianos Karagiannopoulos (Student ID No:170023199)

ABSTRACT
The Republic of Cyprus has commenced its offshore hydrocarbon activities in 2007, when issued a first licensing round for Blocks in its EEZ. As a result, Aphrodite natural gas reservoir has been discovered, and declared commercially viable on 2015. Nevertheless, the declaration of commerciality at this point proved to be rather a contractually dictated necessity than reality; thus, both sides, Cyprus and its Contractors, decided to stall on the development of the field, while searching for better options for the transportation and sale of Aphrodite’s gas. This decision, the reasons that have driven the Aphrodite partners in it and its aftermath are going to be explored in this research paper. The purpose of this research is to explore a complex situation between two parties of a PSC in terms of contract and policy of every party that is related to the project, while the fact that this is a natural gas reserve case, further complicates the situation. In order to comprehensively analyse the subject, a wide variety of primary governmental and corporate sources has been chosen, along with many relevant news and other reports, always with consideration in the petroleum industry unique features and the geopolitical conditions of the Eastern Mediterranean region. The results of this analysis indicate that after both PSC partners have made use of specific contractually deriving rights and by treating each other in good faith, the most profitable option for both will eventually be chosen and their patience will have payed of.

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