Saudi Arabia’s economic investments in Egypt run deep

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Crown Prince Mohammed bin Salman, left, with Egyptian President Abdel Fattah El-Sisi in Cairo on Sunday. (SPA)
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A handout picture released by the Egyptian Presidency on March 4, 2018 shows Saudi Arabia's Crown Prince Mohammed bin Salman (C) shaking hands with Egyptian officials upon his arrival in Cairo. (Egyptian Presidency handout photo via AFP)
Updated 05 March 2018

Saudi Arabia’s economic investments in Egypt run deep

CAIRO: The visit by Crown Prince Mohammed bin Salman to Egypt comes as Saudi investment in the country continues to grow, boosted by easing trade restrictions, a weak Egyptian pound and plans for a bridge linking the two countries.
The Egyptian government is pushing to make foreign investment in the country easier to help the economy recover from the tumultuous period that followed the Arab Spring.
Saudi Minister of State Essam bin Saad bin Saeed said last week that the Kingdom is keen to enhance economic relations with Egypt and intends to pump money into new investments in the country.
According to the Egyptian state news agency MENA, Saudi investments in Egypt top those of other Arab countries.
At the Saudi-Egyptian Business Council last month in Cairo, Egyptian Minister of Trade and Industry Tariq Qabeel said the volume of trade exchange between the two countries in 2017 amounted to about $2.1 billion and that the volume of Saudi investments in Egypt exceeded $6 billion — about 11 percent of all foreign investments in Egypt.
President of the General Federation of Egyptian Chambers of Commerce Ahmed Al-Wakil, said the total Saudi investments in Egypt are worth up to $27 billion, which are spread across 2,900 projects in a huge variety of product and service sectors.
The Kingdom is also the second largest in terms of tourism — accounting for millions of dollars a year, according to Egyptian Ministry of Tourism figures.
The UAE and Kuwait have also been big investors in Egypt since Abdel Fattah El-Sisi became president.
The scale of Saudi Arabia’s investment is expected to increase after officials from Egypt and the Kingdom said they wanted to reduce the number of obstacles between the two countries by standardizing rules and making it easier to transport goods and services between the two.
Egypt has also become a more attractive prospect for investors since the central bank liberalized the exchange rate in November 2016 as part of a $12 billion International Monetary Fund reform program. The pound lost half of its value after the float.
The improved investment environment in Egypt means some major Saudi companies are considering establishing more projects in the Egyptian market.
A number of Saudi businessmen view some of the new cities being built in Egypt as strong investment opportunities.
The most important Saudi investments in Egypt are in the service sector, including energy, transport, logistics, health and education.
The Egyptian-Saudi Electricity Exchange Project, a scheme agreed in 2011 to connect the two countries’ power grids, is probably the most important investment to date.
Minister of Electricity and Renewable Energy, Dr. Mohammad Shaker, said in December that work is ongoing on the project but that the electrical connection lines between the two countries are expected to run in early 2021.
The King Salman Bridge project, which Egyptian sources said would be discussed during Prince Mohammed’s visit, will link Sharm El-Sheikh to the Tabuk region of northern Saudi Arabia.
Construction of the 50-kilometer bridge was announced during King Salman’s visit to Egypt in 2016. The bridge will help pilgrims, tourists and expatriate workers to travel easily between the countries and offer a significant improvement in trade between the two countries.
The bridge is also expected to boost energy links. Dr. Jamal Al-Kalioubi, a professor of petroleum and energy engineering, said the bridge would be one of the important ways to secure the oil and gas needs of neighboring Arab countries.
The visit is also expected to boost energy cooperation. The Egyptian government announced on Thursday that it had agreed with Saudi Aramco to supply 500,000 barrels per month of crude oil to the Egyptian refineries for six months from January to June. The Saudi National Oil Company had already provided oil to the Egyptian refineries in November and December 2017 on a trial basis.
During King Salman’s 2016 visit to Egypt, Riyadh agreed to supply Cairo with 700,000 tons of refined oil products per month for five years.
King Salman witnessed the signing of 21 agreements and investment memorandums of understanding between the two countries, most notably for the establishment of a free trade area in northern Sinai, which is the first important economic project linked to the construction of the bridge.


Attacks on oil facilities in Kingdom threaten world economy: Saudi energy minister

Updated 15 September 2019

Attacks on oil facilities in Kingdom threaten world economy: Saudi energy minister

  • Aramco says no staff injured in attacks
  • Aramco is currently working on restoring the lost quantities

RIYADH: Saudi Arabia’s energy minister said drones that attacked Saudi Aramco installations had caused an interruption of an estimated 5.7 million barrels in crude supplies and threaten the world economy.

Prince Abdulaziz bin Salman said as a result of the terrorist acts, oil production in Abqaiq and Khurais was knocked out temporarily and that estimates show that 50 percent of the company’s production had been interrupted.

Part of the decrease will be compensated to clients through reserves, Prince Abdulaziz said in a statement carried on the Saudi Press Agency.

The newly appointed minister confirmed there were no injuries to staff at the locations targeted, adding that the company is still assessing the resulting damage.

The attacks not only target the Kingdom’s vital installations, but also target the international oil supply and threaten its security, he said, and are a threat to the world economy. 

The blasts took place at 3:31am and 3:42am at the two locations, both in the Eastern Province of Saudi Arabia, causing fires that were brought under control by emergency services.

The drone attacks, at the world’s largest oil processing plant at Abqaiq and at an oilfield in Khurais, highlight the importance of the international community to protect energy supply against “all terrorist sides that carry out, support and finance such cowardly disruptive acts,” the statement said.

He said that these blasts also knocked out the production of 2bn cubic feet of associated gas daily, used to produce 700,000 barrels of natural gas liquids, which will lead to an approximate 50 percent decrease of Ethane and natural gas liquids supply.

The statement said the company is currently working on restoring the lost quantities, and will present updated information within the next 48 hours.

World leaders condemned the attacks on Saudi Arabia on Saturday and those behind the terrorist acts. 

Donald Trump called Crown Prince Mohammed bin Salman to reassert his country's “readiness to cooperate with the Kingdom, by all means conducive to maintain its security and stability.”

The Crown Prince "underscored the Kingdom willingness and strength to thwart such a terrorist aggression and deal with its consequences,” SPA reported on Saturday.

The UAE said it “condemns this act of terrorism and sabotage and considers it as a new evidence of the terrorist groups’ attempts to undermine the security and stability of the region as a whole.”

“The Houthis must stop undermining Saudi Arabia’s security by threatening civilian areas and commercial infrastructure,” said the British government.

“The US strongly condemns today’s drone attacks. These attacks against critical infrastructure endanger civilians, are unacceptable, and sooner or later will result in innocent lives being lost,” said the US envoy in Riyadh John Abizaid.

US Secretary of State Mike Pompeo was emphatic about the need to condemn Iranian aggression, specifically on Saudi Arabia, and the need to ensure the security of world energy supplies.

“Tehran is behind nearly 100 attacks on Saudi Arabia while Rouhani and Zarif pretend to engage in diplomacy. Amid all the calls for de-escalation, Iran has now launched an unprecedented attack on the world’s energy supply. There is no evidence the attacks came from Yemen.” he tweeted, “We call on all nations to publicly and unequivocally condemn Iran’s attacks. The United States will work with our partners and allies to ensure that energy markets remain well supplied and Iran is held accountable for its aggression”

The Houthis, who are backed by Iran, said they had carried out the attacks and that 10 drones had been used.