Egypt sits at a strategic crossroads, positioned between Africa, the Middle East, and Europe. From the Roman era right up through the 20th century, control for Egypt has been the objective of outsiders to gain a geopolitical, economic, and strategic advantage in international affairs.
Where East Meets West
The construction of the Suez Canal in the 19th century paved the way for Egypt to act as vital transit hub in the modern era, and as a result, a major thoroughfare for the trade of energy. The Suez Canal sees large volumes of oil and liquefied natural gas (LNG) travel through its narrow waterways. There is also the Suez-Mediterranean (SUMED) pipeline that connects the Mediterranean to the Red Sea, bypassing the canal. Together, the pipeline and the canal account for 8% of global maritime oil trade.
Struggling Oil And Gas Producer – with Big Potential?
That role as a transit country has long overshadowed Egypt’s status as an oil and gas producer, which, to be honest, has been middling at best. Still, Egypt produces about 700,000 barrels of oil per day, enough to make it the largest non-OPEC African oil producer. It is also produces 2.0 trillion cubic feet of natural gas, the third highest rate of production on the continent.
Yet, Egypt has seen its production decline by an average of 3% over last six years. The culprit is pricing – the Egyptian government caps the level at which it is willing to pay producers of natural gas.…