China’s North Petroleum International Company (NPIC) has announced plans to significantly increase its presence in Egypt’s energy sector. The company has allocated an initial investment of $100 million to acquire new concessions and form partnerships in Egypt’s Western Desert and offshore oil and gas sectors, according to NPIC’s regional director, Sun Bao. This investment is just the beginning of a larger strategic push by China into Egypt, a move backed by billions of dollars, according to a senior European Union (EU) energy security official who spoke to OilPrice.com.
China’s Strategic Interest in Egypt
China’s growing interest in Egypt is driven by the country’s critical role in Western efforts to secure alternative gas supplies after Russia’s invasion of Ukraine on February 24, 2022. In response to energy disruptions, the United States and Europe have heavily invested in Egypt, which sits at the crossroads of North Africa, the Middle East, and the Eastern Mediterranean.
Chevron was among the first Western companies to expand its operations in Egypt, announcing in December 2022 that its Nargis-1 exploration well in the eastern Nile Delta had uncovered at least 99 billion cubic meters of natural gas. Following this discovery, Italy’s Eni also identified a potentially massive offshore gas field in the Red Sea within its concession area, focusing on the Nargis-1 site.
According to Chevron International Exploration and Production President Clay Neff, “The East Mediterranean has abundant energy resources, and their development is driving strategic collaboration in the region.”
UK-based energy firms Shell and BP have since deepened their involvement in Egypt’s gas sector. BP recently committed $3.5 billion to exploration and development in Egypt over the next three years, with the potential to double its investment if new reserves are found. Meanwhile, Shell has begun the tenth phase of its West Delta Deep Marine (WDDM) concession development in the Mediterranean, adding to its earlier nine phases covering 17 gas fields.
Egypt’s Strategic Importance in Global Energy
Both China and the West recognize Egypt’s unique strategic value. Egypt is the only Eastern Mediterranean country with operational liquefied natural gas (LNG) export facilities, positioning it as a key regional hub. Additionally, its control of the Suez Canal, through which about 10% of the world’s oil and LNG pass, adds to its geopolitical importance. The country also manages the Suez-Mediterranean Pipeline, an alternative route for transporting oil from the Persian Gulf to the Mediterranean, bypassing the Suez Canal.
Egypt remains one of the few major energy transit points not under China’s control. China has already secured influence over other strategic locations, including the Strait of Hormuz through its long-term Iran-China 25-Year Comprehensive Cooperation Agreement. Additionally, Beijing has strengthened its grip on the Bab al-Mandab Strait, which connects the Red Sea to the Mediterranean, by leveraging its influence in Yemen and Djibouti through its Belt and Road Initiative (BRI) investments.
Geopolitical and Economic Factors
Egypt has long been a key player in the Arab world, rivaling Saudi Arabia in regional influence. The country was a strong advocate of Pan-Arabism, a movement that promoted unity among Arab nations in politics, culture, and economy. Former Egyptian President Gamal Abdel Nasser, a major proponent of this ideology, played a crucial role in forming the United Arab Republic between Egypt and Syria (1958–1961) and shaping OPEC’s foundation in 1960.
Western powers have sought to strengthen ties with Egypt to counterbalance Saudi Arabia’s increasing alignment with China and Russia.
China’s Renewed Energy Strategy in Egypt
China’s interest in Egypt is not new. NPIC first entered the Egyptian market in 2014, aiming to expand in the Eastern Desert and near the Suez Canal as part of a broader strategy led by its parent company, ZhenHua Oil. ZhenHua Oil operates as the energy arm of Chinese defense conglomerate Norinco.
Under international law, foreign energy firms can station personnel and security staff at oil and gas sites to protect their investments. China has leveraged such provisions to build transport infrastructure, including airports, seaports, and railway networks, which are secured by Chinese personnel. However, Egypt was not a priority for China at the time, as Beijing focused on securing energy resources from Iran, Iraq, and Saudi Arabia after the Ukraine invasion.
Last year, China and Egypt signed a comprehensive strategic partnership agreement set to run until 2028. This deal includes multi-billion-dollar investments in Egypt’s energy, infrastructure, and technology sectors. It also opens avenues for cooperation in artificial intelligence and defense.
Western Response and New Investments
China’s expansion in Egypt has not gone unnoticed by Western nations. In recent weeks, Western energy companies have increased their investments in the country. U.S. energy giant ExxonMobil recently announced a new gas discovery in the Nefertari-1 well, located off Egypt’s northern coast. The company plans to drill two additional wells in the Mediterranean by early 2026 at an estimated cost of $240 million.
In a significant move, Chevron recently received approval to establish a floating production unit in Cyprus’ Exclusive Economic Zone, with a pipeline exporting gas to Egypt. This project will strengthen existing Cyprus-Egypt gas links and enhance Egypt’s role as a key energy hub for European gas supplies.
With China and the West competing for influence, Egypt remains at the center of a strategic energy battle that will shape global energy security in the coming years.
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