Egypt has “inverted” the petrostate model, the Wall Street Journal writes. Unlike Saudi Arabia and other oil-producing countries, where oil production funds a generous social safety net, Egypt has done something of the reverse.
Egyptians are paying elevated prices to international oil and gas companies in order to attract their investment.
The Egyptian government has set high domestic prices for oil and natural gas, making Egypt attractive to outside companies.
Royal Dutch Shell (NYSE: RDS.A), BP (NYSE: BP) and Eni (NYSE: E) have poured billions into the country. Egypt could soon be a net exporter of gas and even has dreams of setting up an Eastern Mediterranean gas hub. But if it does so, it will be financed by ordinary Egyptians.