When you think of countries with powerful militaries, Egypt probably isn't the first name that pops to mind.

With a population officially estimated north of 89 million, Egypt is by far the most populous Mideast nation. It's got nearly three times more people than Saudi Arabia, and more than four times Syria's (shrinking) population -- and 10 million more citizens than either Turkey or Iran. But when it comes to projecting military force, Egypt has always been somewhat less than intimidating.

Emphasis on "has." Because pretty soon, Egypt could boast a robust economy in addition to a powerful population -- and aircraft carriers to defend them both.

Www
French Mistral-class warship. Next port of call: Egypt? Image source: Francisco Gonzalez via Flickr.

First, a bit of history
Our story begins five years ago, and somewhat to Egypt's north, where in 2010, France signed a contract to build and deliver to Russia two powerful Mistral-class amphibious assault ships. Sometimes classed as "helicopter carriers," or even small aircraft carriers, each 16,500-ton Mistral warship is capable of carrying:

  • up to 40 tanks
  • 16 combat helicopters
  • 900 assault troops
  • or a combination of the three

Now, as it turns out, Russia's military adventure in Ukraine last year derailed the Mistral sale -- such that as recently as late last year, France was considering keeping the carriers for itself, or perhaps selling them to an ally such as Canada. Lately, however, rumors have been rumbling of a potential sale to what would ordinarily seem an unlikely buyer: Egypt.

Ahoy, Egypt!
Just last week, The Wall Street Journal reported that Egypt is in talks with France about buying both Mistrals originally destined for Russia. While other buyers may still poach the ships, French officials described the Egyptian talks as "among the serious options." Such a sale would also fall in line with recent French policy of bolstering the Egyptian military through the sale of two dozen Rafale fighter jets, a deal announced in February.

File
Egypt's purchase of 24 Rafales represented DASSAULT's first international sales of the fighter jet. Image source: Konflikty.pl via Wikimedia Commons.

Together with the $5.7 billion Rafale sale, a purchase of two Mistral aircraft carriers would make for nearly $7.5 billion in total arms deals signed between Egypt and France this year -- quite a haul for French armsmakers. The Mistral deal could be even more significant for Egypt itself. As the Journal pointed out this week: "If a deal were reached, the ships would expand Egypt's ability to project force in one of the world's most volatile regions."

Writing along similar lines, at the time the original Russian contract was signed, I noted that "Russia is said to have deployed about 150 tanks in the 2008 Georgian war. Four Mistral-class carriers would suffice to deliver that punch to any country with a shoreline." Substitute "Egypt" for "Russia" in that sentence, and you see how Egypt could soon become a regional superpower in the Mideast.

The big question: Why?
Reasons Egypt would want an aircraft carrier capability are legion, ranging from a desire to leapfrog Turkey's military -- currently racing to become the first Mideast nation to build an aircraft carrier -- to facilitating power projection on foreign military expeditions, such as the one currently under way in Yemen. Perhaps the biggest reason for Egypt wanting to add a naval aviation capability to its military, however, appeared only days after we learned that the Mistral negotiations were under way:

Oil.

Egypt: The rise of a Middle Eastern petro-superpower
Or more precisely, natural gas. Last Sunday, Italian oil giant Eni (NYSE:E) announced that it has struck upon a "supergiant" natural gas field just off Egypt's Mediterranean coast. Dubbed the "Zohr Prospect," the field is believed to contain as much as 30 trillion cubic feet of natural gas, equivalent to 5.5 billion barrels of oil, making it "the largest [gas field] ever found in the Mediterranean Sea."

To put that in context, S&P Capital IQ data confirm that 30 trillion cubic feet is more than Eni's entire total proven gas reserves prior to this discovery. Eni has the license to exploit it, but the gas all lies within "the economic waters of Egypt's Offshore Mediterranean, in 4,757 feet of water depth," according to Eni.

Translation: Egypt owns this gas.

But now they have to defend it.

A nice problem to have
Thirty trillion cubic feet of gas will go a long way toward easing Egypt's energy dependence on foreign nations. Eni says the Zohr field could satisfy Egypt's gas needs "for decades." But in a region as volatile as the Middle East, and one in which wars are regularly fought over the control of natural resources, the Zohr Prospect is only definitively Egypt's if the country can control the field and protect it from rivals.

The good news for Egypt, however, is this: At the same time as discovery of the Zohr Prospect makes acquiring an aircraft carrier fleet desirable, revenues from all that gas should make those same carriers a whole lot more affordable.

Indeed, Egypt's military expansion may have only just begun.

Mistral
Image source: TASS.

Rich Smith does not own shares of, nor is he short, any company named above. You can find him on Motley Fool CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked No. 260 out of more than 75,000 rated members.

The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.