Qatar, Turkey Push to the Ascending Egyptian Economy
December 20, 2021, 7:24 am

Qatar, Turkey Push to the Ascending Egyptian Economy

Dalia Ziada

On December 13th, the oil giant “Royal Dutch Shell plc. (commonly known as Shell Company)” announced selling 17% of its project rights in oil and gas blocks in the Egyptian Red Sea, to Qatar Energy. After government approvals from both sides, this will be the first time ever Qatar make direct invests in the Egyptian oil sector. On one hand this indicates how strong the relationship between Egypt and Qatar has become, since the Gulf Reconciliation agreement in January. But most importantly, it refers to how strong the Egyptian economy, especially the energy sector, has become an attraction to giant oil investors from the Middle East region and beyond.

The Qatar Energy investments in the Egyptian Red Sea oil and gas explorations, will allow Qatar to acquire 17% stake in each of Block 3 and Block 4 operated by Shell Exploration & Production (93) B.V., which is a subsidiary of Royal Dutch Shell plc. Meanwhile, Shell, which owns 43% of Block 3 and 21% of Block 4, will remain the operator of both blocks. Another Gulf investor in the same project is the Emirati Mubadala Petroleum LLC., which owns 27% in Block 4. Besides, two Egyptian companies are investing in the project: BHP Petroleum (Egypt) Limited with 30% in Block 3 and 25% in Block 4, and the Egyptian Tharwa Petroleum S.A.E. with 10% in Block 3 and 10% in Block 4.

Shell sold the shares to Qatar Energy and the aforementioned investors based on a Farm Out Agreement (FOA), which is a type of contract which enables an existing project participant to add new parties to the project by selling a percentage stake in the venture. For the agreement to be put in effect, the Egyptian government and parliament must endorse the procedure. Given the positively developing relationship between Qatar and Egypt, it is highly likely that the Egyptian leadership will welcome the Qatari investments in its booming energy sector.

Since the signing of Al-Ula agreement, during the Gulf Summit, held in January, Egypt and Qatar have been determined to fix their torn relationship and build a fruitful cooperation, not only on fulfilling bilateral interests, but also on co-managing chronic regional troubles, such as the Israel-Palestinian conflict. Since the latest episode of war between Israel and Hamas, in May, Egypt and Qatar have been closely coordinating to reconstruct the Gaza strip and provide humanitarian aid to the Palestinians living there. This level of cooperation between Egypt and Qatar was an impossibility, only a few months ago.

Unlike what most people believe, this is the first time ever Qatar Energy directly invests in the Egyptian ascending economic power of oil and natural gas. In the past, all Qatar investments in Egypt’s energy sector were channeled through the Arab Refining Company (ARC), and limited to one project that started in 2012, under the rule of the Muslim Brotherhood, and was not completed until in 2019. To further explain; ARC is owned by private shareholders, including the Egyptian Citadel (Qala’a) Holdings and some Arab Gulf investors. One of the giant Gulf investors in ARC was the Qatari state-owned company “Qatar Petroleum,” which changed its name later to “Qatar Energy.” It owns 38.1% of the ARC shares. The Arab Refining Company owns 66.6% in the Egyptian Refining Company, which is an Egyptian state-owned company. That is why there were cooperation between Qatar Petroleum and the Egyptian Refining Company, in the past. But, again, it was not a direct investment in the Egyptian energy sector and was limited to only one project, which is not as huge as the current investments Qatar is currently seeking to make in the Egyptian Red Sea.

In addition to Qatar, Egypt’s relationship with Turkey is taking a new positive turn as the two sides started to make a fruitful use of the Mediterranean wealth of natural gas. According to data published by S&P Global Platts Analytics, in the period between October and December, Egypt shipped to Turkey seven cargos of Liquified Natural Gas (LNG), extracted from Idku and Demietta plants, at Egypt’s shores in the Mediterranean. This is the first time Egypt provides Turkey with such high volume of LNG exports, despite its contracts with Greece and Cyprus, within the EastMed Gas Organization. In the past, similar exports from Egypt to Turkey were only limited to mineral oils and plastics.

Qatar investments in the Egyptian energy sector and Turkey’s growing dependence on Egypt for natural gas supply are indicators on the increasing strength of the Egyptian economy. In a recent report, the International Monetary Fund expected that Egypt, in 2022, will be the second largest economy in Africa, after Nigeria, and the second largest economy in Arab countries, after Saudi Arabia, with a record GDP that exceeds US$438 billion.

Keeping healthy and balanced relations with all its neighbors in the Middle East, the Mediterranean, and Africa is the real secret behind Egypt’s economic success, despite the pandemic that brought even the most established economies on its knees. It would be interesting to watch how Egypt can balance its economic relations with the Qatar-Turkey axis, with its existing relationships with other Gulf and Mediterranean actors.

BY: Dalia Ziada

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BENEFIT, the Kingdom’s innovator and leading company in Fintech and electronic financial transactions service, has sponsored the BuildHer CityHack 2025 Hackathon, a two-day event spearheaded by the College of Engineering and Technology at the Royal University for Women (RUW).
Aimed at secondary school students, the event brought together a distinguished group of academic professionals and technology experts to mentor and inspire young participants.
More than 100 high school students from across the Kingdom of Bahrain took part in the hackathon, which featured an intensive programme of training workshops and hands-on sessions. These activities were tailored to enhance participants’ critical thinking, collaborative problem-solving, and team-building capabilities, while also encouraging the development of practical and sustainable solutions to contemporary challenges using modern technological tools.
BENEFIT’s Chief Executive Mr. Abdulwahed AlJanahi, commented: “Our support for this educational hackathon reflects our long-term strategic vision to nurture the talents of emerging national youth and empower the next generation of accomplished female leaders in technology. By fostering creativity and innovation, we aim to contribute meaningfully to Bahrain’s comprehensive development goals and align with the aspirations outlined in the Kingdom’s Vision 2030—an ambition in which BENEFIT plays a central role.”
Professor Riyadh Yousif Hamzah, President of the Royal University for Women, commented: “This initiative reflects our commitment to advancing women in STEM fields. We're cultivating a generation of creative, solution-driven female leaders who will drive national development. Our partnership with BENEFIT exemplifies the powerful synergy between academia and private sector in supporting educational innovation.”
Hanan Abdulla Hasan, Senior Manager, PR & Communication at BENEFIT, said: “We are honoured to collaborate with RUW in supporting this remarkable technology-focused event. It highlights our commitment to social responsibility, and our ongoing efforts to enhance the digital and innovation capabilities of young Bahraini women and foster their ability to harness technological tools in the service of a smarter, more sustainable future.”
For his part, Dr. Humam ElAgha, Acting Dean of the College of Engineering and Technology at the University, said: “BuildHer CityHack 2025 embodies our hands-on approach to education. By tackling real-world problems through creative thinking and sustainable solutions, we're preparing women to thrive in the knowledge economy – a cornerstone of the University's vision.”