Egypt: Suez Special Economic Zone Attracts Chinese Companies and Capital

Over the past two years, the Suez Canal Special Economic Zone (SCZone), established by the Egyptian government, has attracted about 6 billion dollars in investment, 40% of which is capital of Chinese origin. Walid Gamaleldin, head of the state agency that manages Suez zone activities, told China’s Xinhua news agency that 160 Chinese companies are currently operating in the SCZone, producing, among other things, “fiberglass, new construction materials, petroleum equipment, electrical appliances, high and low voltage equipment, processing equipment, and other products that are in great demand in the Middle East, Africa, and the rest of the world.”

The implementation of the SCZone project was entrusted back in 2008 to the Chinese company Teda, which managed to develop a vast desert area near the city of Ain Sokhna in Suez Province and founded the “China-Egypt Teda Suez Economic and Trade Cooperation Program,” after which dozens of Chinese companies launched their production and commercial activities in this special economic zone.

Recently, land has become scarce, and Egyptian authorities have begun a new round of negotiations with Teda to expand its territory by another 3 square kilometers to accommodate new Chinese enterprises.

The inflow of foreign capital into Egypt is favored by relative political stability, a fundamental factor that does not exist in many other North African countries. Libya’s oil production fell sharply, from 985,000 bpd (August 26) to just 591,000 bpd on Aug. 28. Such a sharp drop in oil production came after the Presidential Council announced its decision to fire Libya’s Central Bank Governor Siddiq Kabir and the entire board of directors. The decision was rejected by the Governor himself, the Parliament, and the High Council of State.

In response, the so-called “Parallel Government” led by Osama Hammad, which controls Libya’s eastern territories, announced the imposition of a state of “force majeure” on all oil fields, ports, institutions, and facilities, as well as a temporary halt to oil production and exports. The three-day blockade cost Libya more than $120 million dollars.

As the American agency Oil Price wrote, the cessation of oil supplies from Libya has created a state of uncertainty in global markets: after the announcement, Brent crude oil prices exceeded the psychological quote of 81 dollars per barrel to return to the range of 78.9-79.0 dollars per barrel on Friday, August 30.

At the same time, Iraq’s oil exports topped 108.05 million barrels in July. According to the latest figures released by the Iraqi Ministry of Finance, “oil revenue for the first five months of the year – January through May 2024 – amounted to approximately $41.3 billion.” Iraq’s revenues from oil exports account for almost 90% of the Arab country’s budget.

Finally, in terms of natural gas production and exports from North Africa and the Middle East, Algeria was the seventh largest producer and exporter of natural gas in 2023. As the International Gas Union (IGU) wrote in its latest report titled “Global Gas Report 2024” (download a PDF file in English from Pluralia’s website), compiled in collaboration with Italian energy infrastructure company SNAM and independent energy research and monitoring company Rystad Energy, “last year, Algeria exported a total of 18 billion cubic meters of liquefied natural gas and 34 billion cubic meters of natural gas through pipelines.”

As for the true “majors” of gas production, Russia traditionally ranks first in the world with 139 billion cubic meters of gas exports in 2023, followed by Qatar (128 billion cubic meters), the USA (127 billion cubic meters), Norway (120 billion cubic meters), Australia (110 billion cubic meters), and Canada (53 billion cubic meters).

To download the Global Gas Report 2024 from Pluralia’s website (PDF in English), follow the link.