Reuters Gulf Currents Newsletter – Qatar buys in as Egypt sells coast

By Andrew Mills
Deputy Bureau Chief, Gulf

The Reuters Gulf team was on the ground in Abu Dhabi for the annual ADIPEC meeting this week, where energy, AI, and geopolitics collided.

Microsoft is doubling down on the UAE’s AI boom. ExxonMobil and QatarEnergy turned up the heat on Brussels, warning that proposed EU climate rules could jeopardize LNG supplies to the continent. And a $35 billion Israeli gas deal with Egypt is on ice, with politics — not pipelines — holding things up.

Plus: Egypt sells off more of its coastline for Gulf cash, and Qatar and Bahrain try (again) at a direct transport link.

For occasional updates from Reuters’s Gulf team between editions of the newsletter – plus snapshots from a reporter’s life in the Gulf – follow me on Instagram @and.mills.

News briefing:

Microsoft is doubling down on the UAE’s AI boom, pledging this week to boost investments through 2029 to $15 billion. It now has U.S. approval to ship NVIDIA’s most advanced chips to the Emirates for use in its data centres (which will also expand), though details on U.S. export licenses for selling chips to Emirati firms are still being hammered out.

QatarEnergy and ExxonMobil upped pressure on the EU to drop a proposed sustainability law requiring global compliance with the Paris Agreement or face fines of 5% of global revenue. Exxon’s CEO warned in Abu Dhabi that the company could halt LNG sales to Europe—jeopardizing a key energy supply—if the rule isn’t scrapped, calling the potential fallout “disastrous.” Will Brussels blink?

A $35 billion deal for Israel to supply Egypt with gas is on hold amid political friction, with Israel’s government delaying approval to push for better terms. The chief executive of Energean, a company at the centre of the East Med energy race, is waiting for the deadlock to break, which would ease Egypt’s energy crisis: “I paid $47 million already—if I didn’t have confidence, it would not be a very wise decision,” Mathios Rigas told Reuters this week in Abu Dhabi.

Egypt sells more coastline for Gulf cash, this time to Qatar

Egypt has sold off another stretch of its prized Mediterranean coastline — this time to Qatar — in exchange for a much-needed financial lifeline.

We broke news this week that Qatari Diar, the real estate arm of Qatar’s sovereign wealth fund, will pay $3.5 billion for a 1,985-hectare plot 480 km northwest of Cairo. The total deal is worth $29.7 billion, with Qatar planning to build a luxury, year-round destination featuring high-end neighbourhoods, golf courses, and more.

The upfront cash is critical for Egypt, which is grappling with soaring debt and a swollen budget deficit. It could also help unlock about $2.5 billion in delayed IMF funding under an $8 billion package agreed in 2024.

Cairo had promised the IMF a major Qatari investment by

mid-2025. When it didn’t arrive, the IMF froze disbursements. The lender also had concerns about Egypt’s failure to divest state assets.

“This investment should get the IMF money flowing again,” said Reuters correspondent Patrick Werr in Cairo.

Qatar’s deal, while welcome, is well under last year’s $50 billion windfall from the UAE’s ADQ for a stretch of Mediterranean coastline at Ras El-Hekma.

With both Qatar and the UAE now committed, attention shifts to Saudi Arabia, where potential investments at Ras Gamila on the Sinai Peninsula and Ras Banas along the Red Sea Coast have stalled.

“It’s not clear why,” Werr said, adding that possible factors include tensions between Saudi Crown Prince Mohammed bin Salman and Egyptian President Abdel Fattah al-Sisi, Saudi complaints about Egyptian bureaucracy or something unknown.

“There's also the possibility that the Saudis don't have as much money as they did before, and that they're a bit reluctant to put a huge amount into a project,” Werr said.

Chart of the week

ExxonMobil and QatarEnergy are among Europe’s top LNG suppliers, with the U.S. major contributing to the roughly 50% of EU imports from American producers in 2024, while Qatar has supplied between 12% and 14% of the bloc’s LNG since Russia’s 2022 invasion of Ukraine.

The two companies, whose gas shipments to the continent ramped up sharply after it cut off supplies from Russia, are now pushing the bloc to abandon part of its green strategy.

The Last Wave:

Qatar and Bahrain are giving cross-border transport another go, launching a passenger boat on Thursday that will shuttle twice daily across the 65 km stretch of Gulf waters that separates them. Naturally, there are standard and — because this is the Gulf — VIP vessels.

The broader dream? Regional integration. The reality? A long history of false starts.

Back in 2009, engineers opened offices in Qatar to begin planning construction on a $2.3 billion bridge linking the two countries. It was supposed to be ready before the 2022 World Cup. Construction never began. The project was quietly set aside in 2017.

So for now, it’s back to boats.

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