CONTRACTS for the first hydrocarbon exploitation licence were signed on Thursday and were described by energy minister Giorgos Lakkotrypis, as “another milestone in Cyprus’ energy programme”. It was the first real milestone of our energy programme because as we have learnt over the last few years, licensing rounds, surveys, exploratory drilling and discoveries of deposits might create big expectations, but until contracts for the exploitation of the findings are signed, their commercial value is theoretical.
This is an illustration of the extremely slow pace at which the oil and gas industry moves. The discovery at the Aphrodite field in block 12 was announced in December 2011, the exploitation licence was finalised in 2019 and production is scheduled to begin in 2025. It will be 14 years after the discovery before revenue will start coming in. Even then, it will be reduced because the bigger share will go towards covering the big investment by the oil companies, estimated to be in the region of €7 billion.
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