By Bosphorus News Energy Desk
The Republic of Cyprus and Israel are aiming to conclude their long-running Aphrodite-Ishai gas agreement by the end of October, Cyprus Mail reported Saturday, as Chevron and its partners advance engineering work toward a Final Investment Decision (FID). Neither government has publicly announced the end-October date, but the Republic of Cyprus has made completion of an Aphrodite agreement with Israel one of its 2026 energy objectives and officials from both countries have spent the year working on compensation for the part of the reservoir extending into Israel's Ishai licence.
President of the Republic of Cyprus Nikos Christodoulides pressed for faster implementation this week. He met Chevron Base Assets and Emerging Countries President Javier La Rosa in New York on September 22, where the two sides reviewed technical and commercial work on Aphrodite and the steps required before FID. Christodoulides called for the project to move from planning into implementation.
What the Aphrodite-Ishai deal would settle
The negotiations do not concern a new maritime boundary between the Republic of Cyprus and Israel. They concern economic rights in a reservoir that crosses their existing exclusive economic zone (EEZ) boundary.
A March regulatory filing by NewMed Energy says Aphrodite lies almost entirely on the Cypriot side, while a few percent of the reservoir area extends into Israel's Ishai/370 licence. Under the understandings being discussed, Aphrodite would be developed by the interest holders on the Cypriot side, while the Ishai licence holders and the State of Israel would receive a one-time payment reflecting their share of the reservoir. An international expert would determine the Israeli share on which compensation would be based.
Israeli Energy Ministry and Justice Ministry officials travelled to Cyprus earlier this year as the two governments worked to put the mechanism into an intergovernmental agreement. Development would remain with the Aphrodite partnership rather than move to a joint operating structure.
The current negotiations build on the process that had already brought Israel and the Republic of Cyprus close to an Aphrodite-Ishai agreement in January. Subsequent regulatory filings have provided a clearer picture of the compensation mechanism now under discussion.
The Republic of Cyprus Hydrocarbons Service gives Aphrodite a best-estimate gas-in-place figure of 5.6 trillion cubic feet. Chevron Cyprus Limited operates Block 12, where the field is located, and a revised Development and Production Plan was approved in February 2025.
Engineering continues while Israel talks proceed
The Aphrodite partners have entered Front-End Engineering Design (FEED), one of the steps required before FID. The approved development plan calls for an independent floating production unit above the reservoir and a subsea pipeline connecting Aphrodite with Egypt's gas transmission system. NewMed puts the FEED program at about $106 million.
Engineering is already under way, independently of the negotiations with Israel. An agreement would remove a long-running cross-border commercial issue while Chevron and its partners continue technical and contractual work on the field.
Israeli Ambassador to the Republic of Cyprus Oren Anolik has cautioned against treating the signature itself as the end of the process. He said an agreement would establish the principles before the mechanism for calculating the Israeli share is applied. Previous target dates have slipped, making the end-October date a current target rather than a firm deadline.
Egypt is already central to the commercial plan
Aphrodite's planned export route is centered on Egypt. Egyptian Petroleum and Mineral Resources Minister Karim Badawi met Chevron's La Rosa on September 22 to discuss the technical, financial and commercial arrangements required to connect the field with Egyptian infrastructure. Cairo called for the remaining procedures and agreements to be accelerated.
In April, the Aphrodite partners and Cyprus Hydrocarbons Company initialled a term sheet with the Egyptian Natural Gas Holding Company (EGAS) covering all recoverable gas from the field. The commercial terms provide for a main supply rate of 700 million standard cubic feet per day, with Port Said as the final delivery point and pricing linked to Brent crude within an agreed floor and ceiling.
A Host Government Agreement was initialled in parallel for the offshore transmission project linking Aphrodite with the Egyptian system. The framework covers the construction, financing, operation and maintenance of the transmission infrastructure.
NewMed said on July 22 that all signatures on the gas-sale memorandum with EGAS had been obtained. The parties were still negotiating a binding gas supply agreement, while completion of all signatures on the Host Government Agreement remained pending. Egypt said on September 22 that outstanding frameworks, procedures and agreements were still being accelerated.
That commercial structure follows the Cyprus-Egypt framework linking Aphrodite to Egypt's gas and liquefied natural gas export system, placing Egypt at the center of the field's planned route to market.
The Egypt route is moving separately from the Ishai talks. An agreement with Israel would establish the mechanism for compensating the Israeli and Ishai interests in the reservoir rather than create Aphrodite's export route.
Shell sale sets up MOL entry into Aphrodite
Aphrodite is currently held by Chevron Cyprus Limited with 35%, BG Cyprus Limited with 35% and NewMed Energy with 30%, with Chevron as operator.
The ownership structure is also set to change after MOL agreed to acquire Shell's 35% Aphrodite interest through BG Cyprus Limited. Shell agreed on July 31 to sell BG Cyprus Limited to MOL Hungarian Oil and Gas Public Limited Company (MOL) for up to $720 million.
Shell and MOL's transaction announcements said the deal was expected to close in early 2027, subject to regulatory approvals and other closing conditions. The Republic of Cyprus Hydrocarbons Service continues to list BG Cyprus in the Block 12 consortium, while Shell says MOL will assume the stake's rights and obligations when the transaction is completed.
The companies also publish different dates for the next investment milestone. MOL's transaction announcement put FID in 2027, while NewMed's current Aphrodite project page lists FID in 2028. Both point to first gas in 2031. Shell confirmed when announcing the sale that FID had not yet been taken.
Christodoulides is pressing for the schedule to accelerate, while NewMed's current project timetable still puts the investment decision in 2028.
Türkiye and the wider Cyprus hydrocarbons dispute
The Aphrodite-Ishai agreement addresses a specific issue between the Republic of Cyprus and Israel. It would not settle the wider dispute over offshore resources around Cyprus.
Türkiye's official position remains that Turkish Cypriots have equal rights over the island's natural resources and should participate in decisions over their development. Ankara also maintains separate maritime jurisdiction claims in parts of the Eastern Mediterranean.
Block 12 is treated differently in the current project documentation. NewMed's March filing records the wider Cyprus-Türkiye maritime dispute but says that, according to Turkish official reporting, Türkiye does not claim ownership of the area in which Block 12 is located.
Aphrodite's development work is continuing independently of the Ishai negotiations. The development plan is approved, FEED is under way, Egypt is the intended buyer and infrastructure outlet, and Shell has agreed to sell its stake to MOL.
If the Republic of Cyprus and Israel conclude the Aphrodite-Ishai agreement by the end of October, one of the field's longest-running commercial issues would finally have a defined settlement mechanism. FID would still depend on Chevron and its partners completing the engineering, contractual and commercial work.
Sources: Republic of Cyprus Presidency, Republic of Cyprus Ministry of Energy, Commerce and Industry, Republic of Cyprus Hydrocarbons Service, Israel Ministry of Foreign Affairs, NewMed Energy regulatory filings, Chevron, Shell, MOL Group, Egyptian Ministry of Petroleum and Mineral Resources, Türkiye Ministry of Foreign Affairs, Cyprus Mail, Bosphorus News review and reporting.