Why Egypt’s Oil And Gas Discoveries Are Crucial For The Region
Authored by Simon Watkins for Oilprice.com
Since Russia invaded Ukraine on 24 February 2022, the West has been scrambling to find reliable sources of consistent oil and gas supplies to compensate for those lost by Russia. At the same time, and cognisant of this dire need, China and Russia, have done their utmost to deny the West any such opportunities. An additional crucial factor at play in this element of the new global oil market order is that China and Russia want to expedite the creation of a pan-Arabic ‘unified power grid’ – in every sense of the phrase.
The basic notion reflects the view on how to maintain control over people or countries espoused by former U.S. President Theodore Roosevelt: “If you’ve got them by the balls, their hearts and minds will follow.” In this context, control over a unified Middle Eastern power grid means that China and Russia would be able to exert even more authority over countries dependent on that grid for their electricity than they otherwise might. Egypt is at the centre of these plans for a unified power grid, so the two recent announcements by Western firms of major new discoveries in that country are extremely significant.
The first of these came from one of the core companies that has been at the vanguard of the West’s attempts to secure new oil and gas supplies since the Russian invasion of Ukraine – Chevron. According to the U.S. oil and gas giant, it is set to drill the first oil and natural gas exploration well in its concession area in the Red Sea in Egypt during the first half of 2024.
This follows extensive seismic surveys, geological studies, and geophysical data collection by the company earlier this year. This, in turn, is part of a major strategic push by Chevron and the U.S. government to secure Egypt as a key ally in the new global oil market order, which received a vital boost in 2019 when Chevron won Egypt’s first international bid round for oil and gas exploration in the Red Sea.
Egypt is extremely important in the Arab world for several reasons, all of which are fully appreciated by the U.S. This is why it is figuratively pulling out all the stops to consolidate its influence there and to keep the country out of China’s and Russia’s sphere of influence. For decades, Egypt was seen by the Arab world as the leading proponent of the ‘Pan-Arab’ ideology that believes enduring strength can only be found in the political, cultural, and socioeconomic unity of Arabs across the different countries that emerged after the two World Wars.
The philosophy’s most powerful recent proponent was Egypt’s President from 1954 to 1970, Gamal Nasser. Arguably his ideological successor was Syria’s President from 1971 to 2000, Hafez al-Assad. Among the most palpable signs of this movement at the time was the formation of the United Arab Republic union formed between Egypt and Syria from 1958 to 1961, the formation of OPEC in 1960, the series of conflicts with neighbouring Israel over the period, and then the 1973/74 oil embargo.
