Overview
Located at the crossroads of Europe, Africa, and the Middle East, the Republic of Cyprus (ROC) offers opportunities for U.S. energy and energy-sector service providers in the areas of consulting, environmental assessment, offshore hydrocarbon exploration and exploitation, supplying natural gas for domestic use, energy storage, and basing of auxiliary energy services for the wider region. Currently, the island is powered almost exclusively by heavy fuel oil and a slowly increasing number of renewable energy sources. The government is making efforts to import natural gas for domestic use. The ROC is planning to increase its deployment of renewable energy and add storage capabilities to meet EU Green Deal goals and to avoid significant EU carbon emission penalties. It is working with consultants to determine how to restart the stalled construction of a liquified natural gas (LNG) terminal with a Floating Storage and Regasification Unit (FSRU).
Exploration efforts and exploitation discussions of natural gas deposits in the ROC’s Exclusive Economic Zone (EEZ) resumed in 2025 with some additional discoveries of natural gas deposits that could lead to commercialization. In 2014, the ROC ended the state-owned Electricity Authority of Cyprus’s (EAC) monopoly on electricity generation and distribution. However, promoting competition remained difficult, given the small size of the domestic market. The Cyprus Energy Regulatory Authority (CERA), in cooperation with the Transmission System Operator (TSO) and other energy stakeholders, were able to alleviate competition constraints in the power generation sector, and new market rules for the Competitive Energy Market (CEM) were finally fully implemented on October 1, 2025. Within the framework of the CEM, an electricity exchange was created in the ROC and began operations on September 30, 2025.
The U.S. Embassy Political and Economic team can assist any company interested in pursuing energy opportunities in the ROC. For more information on the energy landscape, please contact Commercial Specialist Ms. Ephie-Yvonnie Charalambidou.
Oil and Gas Exploration and Exploitation
Overview
In February 2025, the ROC approved the development plan for the ‘Aphrodite’ gas field, located in Block 12 of the ROC’s EEZ field, enabling the licensed operator, a consortium led by Chevron and including Shell and NewMed Energy, to proceed with pre-FEED (front end engineering design) and FEED through 2027 when a final investment decision (FID) is expected. Related negotiations between the ROC, Chevron, and Egypt (expected to import most of the gas) continue concurrently. According to estimates, Aphrodite’s offshore gas deposits total between 3.5 and 4.5 trillion cubic feet (tcf). The project anticipates first gas in the 2030-2031 timeframe.
Ten of thirteen blocks within the ROC’s EEZ are currently licensed, and exploration efforts in a few of them have identified hydrocarbon deposits, though quantities and commerciality remain to be confirmed. Licensed operators, including ExxonMobil/Qatar Petroleum, and ENI/TOTAL resumed exploration efforts in their respective blocks in 2025. In February 2025, Cyprus and Egypt separately signed nonbinding MOUs with Chevron and ENI to pursue commercial agreements to export gas to Egypt’s existing infrastructure. Media reported the ROC expected first gas from the “Kronos” field located in the ENI/TOTAL-operated block 6 by 2027, but as of October 2025, no development plan for the field had been submitted for approval.
For more information on other licensed blocks in the ROC’s EEZ for exploration, and details from previous licensing rounds, please visit the Ministry of Energy, Commerce, and Industry’s Hydrocarbons Service website. Note: the ROC is the sole internationally recognized government on the island, and only the ROC can assert maritime claims from the territory of Cyprus. The U.S. government does not recognize the “TRNC,” nor the validity of licenses awarded by the “TRNC” to Turkish Petroleum (TPAO).
Leading Sub-Sectors and Opportunities
Support Services for Hydrocarbon Exploration and Exploitation / Drilling Equipment:
With the resumption of hydrocarbon exploration efforts within the ROC’s Exclusive Economic Zone (EEZ), and the potential for hydrocarbon extraction and development, U.S. companies offering related support services and drilling equipment could find potential opportunities in Cyprus. Moreover, Cyprus’ location can serve as a base for U.S. companies to pursue similar opportunities in the region.
Education – Energy Related Degrees from Cypriot Universities in Collaboration with U.S. Universities:
With the discovery of offshore hydrocarbons in the ROC’s Exclusive Economic Zone (EEZ) and the deployment of renewable energy sources on the island, many local universities have designed curricula and degree programs in hydrocarbons, petroleum engineering, and related sectors. Cypriot universities are interested in establishing linkages with U.S. universities specializing in these and related fields.