Nicosia, Cyprus. Former energy minister George Papanastasiou said on Friday that the Cypriot government would have had a say in Royal Dutch Shell’s planned sale of BG Cyprus Ltd to Hungarian oil and gas company MOL.
Government approval
Papanastasiou said that, as the licensor of the Aphrodite gas deposit in Block 12 of Cyprus’ exclusive economic zone, the Republic of Cyprus would have had the right to approve or reject a change in ownership.
“I would expect the Republic of Cyprus to have had a say. A change in ownership will have been subject to government approval,” he told the Cyprus Mail.
He said Cyprus could refuse to acquiesce to a sale but would need a documented reason. As an example, he said the Republic would have given a negative response if Shell had intended to sell the unit to the Turkish Petroleum Corporation, Tpao.
Potential implications for Aphrodite
Papanastasiou said a larger company such as Royal Dutch Shell may have been less interested in a relatively small deposit such as Aphrodite because it has access to larger deposits elsewhere.
He said MOL could show greater interest and move more quickly towards commercialisation because, as a smaller company, it may be more focused on Cyprus than Shell had been.
However, he said Shell had always been a major player and that, while MOL is not a small player, it does not have the same scale as Shell. He said this could be important in the turbulent region in which Cyprus is located.
Sale agreement
Royal Dutch Shell announced earlier on Friday that it had reached an agreement to sell BG Cyprus Ltd, the BG Group’s Cyprus unit, to MOL for up to $720 million (€628 million).
The price is subject to customary adjustments and further milestone-linked payments.
BG Cyprus holds a 35 per cent stake in the rights to exploit natural gas in Block 12. Chevron holds another 35 per cent stake, while Israeli energy company NewMed Energy holds the remaining 30 per cent.