New offshore natural gas discoveries key for many long-term investors
Encouraged by Egypt’s economic reforms, a major gas find, streamlined business rules and a devalued currency, investors are increasingly optimistic about prospects for the North African country after years of political turmoil.
Foreign holdings of Treasury bills hit a record high in December, foreign inflows into the stock market last year were the highest since 2010 and direct investment by foreign firms and private equity funds is on the rise again.
Key for many longer-term foreign investors are the natural gasfields that have come on stream in the last few months, including the offshore Zohr field, whose estimated 30 trillion cubic feet makes it the largest in the Mediterranean.
Iyad Malas, a Dubai-based partner of private equity firm Gateway Partners, said Zohr “will be a game changer for Egypt” and the company’s fund, which invests in Asia, the Middle East and Africa, is looking at several opportunities in Egypt.
The gas discoveries should eventually make Egypt a gas exporter and boost its plans to become a regional energy hub.
Besides the gas, private equity firms say reforms launched since the end of 2016 that secured a $12 billion loan program from the International Monetary Fund (IMF) have shifted sentiment enough to spur investment, despite the risks.