If the Israeli and Cypriot companies licensed to develop the Aphrodite-Yishai gas field do not reach an agreement on the matter by March 4, the state will get involved, Energy Minister Karin Elharrar said last week in a letter to Nammax Oil and Gas Ltd.
“Israel never gave up on its rights to the Yishai Reservoir, including the demand that the reservoir not be opened unilaterally... This stance has been made clear to all sides a number of times on different occasions,” she wrote in response to a letter from Herzliya-based Nammax, which, together with Israel Opportunity, holds the license to operate the field.
Israel and Cyprus have been involved in a years-long dispute over the development of the gas field in the Mediterranean. About 10% of the Aphrodite-Yishai gas field is in Israel’s exclusive economic zone, and the rest belongs to Cyprus. The two countries agreed in 2010 to develop it together.
The Energy Ministry estimates the Israeli part of Aphrodite-Yishai has 10 billion to 12 billion cubic meters of natural gas, much less than the Leviathan gas field, which has an estimated 605 bcm.
After Cyprus moved toward developing Aphrodite, the Energy Ministry under former minister Yuval Steinitz agreed with its Cypriot counterpart last March that the companies involved would negotiate and reach an agreement within a year.
“The window of opportunity for direct negotiations between the commercial sides is close to ending,” Elharrar wrote. “If the companies do not reach a solution by March 4, the negotiations will once again be led by the states.”
Despite past agreements, by which the countries would develop the gas field together, the 2021 agreement said Israel would give up on its rights to its part of Aphrodite-Yishai and take monetary compensation instead.
A study by economist Yehoshua Hoffer for the Yishai holding group found such a deal could net the government about NIS 5 billion in royalties and taxes.
This is the first time in nearly 10 years of negotiations over Aphrodite-Yishai that an energy minister has declared an official ministry stance on the matter, showing her personal involvement, Nammax said.
The Yishai holding group said it was satisfied with Elharrar’s letter.
“Up until now, Israel dragged its feet and for unclear reasons surrendered to the whims of Cyprus despite a signed accord between the countries,” it said. “As long as Israel is willing to accept the demands of Cyprus and its partners and give up on all of its rights and assets in the reservoir... Israel should at least get appropriate and respectable compensation... The development of Aphrodite is a fact on the ground, and the minister is doing the right thing in standing up for the Israeli public’s rights.”