The main military obstacle to new oil discoveries in today's Middle East isn't the work of insurgents.

This one's on the Nazis.

The deserts of North Africa, where some of the fiercest battles of World War II were fought, are now the last frontiers of light, sweet crude. Libya has shown the area's potential, with that country now officially holding Africa's largest proven crude reserves (41 billion barrels).

Meanwhile, right next door in Egypt, bountiful underground oil is buried under 22 million land mines courtesy of the Desert Fox, Gen. Erwin Rommel, and his enemies in the British Eighth Army.

But the road to investing in Egypt's oil and their energy-fed economic boom is getting clearer by the day.

Access to Oil in Egypt Blocked, But Stock Market Still Rallies

Leading German news magazine Der Spiegel recently ran a feature on Egypt's northwestern region, where the pivotal battle of el-Alamein was fought.

There, towards the Libyan border, 4.8 billion barrels of oil lie underground . . . and just 13% of the landmines in the area have been cleared.

"The mines," national landmine clearing director Fathy el-Shazly says, "deny access to approximately 22% of the national territory."

Nevertheless, the Egyptian economy is growing rapidly, drawing more international investment than ever before.

The Cairo Stock Exchange main index has enjoyed a more than 400% increase in the past five years to a market cap of more than $150 billion, and the exchange group is about to launch an ETF on Wall Street based on the CASE 30 index of blue-chip Egyptian stocks.



The land of the Pharaohs is drawing more and more energy exploration in the age of Peak Oil, and leaving one-fifth of the country closed to capital is an untenable situation.

Egypt is itching to move forward, since the hydrocarbons in just that one area would boost Egypt's oil reserves to par with those of the southwestern African nation of Angola, which is a member of OPEC.

In the meantime, the country is asserting its resource wealth in other ways.

LNG Business Rising Rapidly; Egypt Oil to Follow

Strategically located on the Mediterranean and the Suez Canal, Egypt is a western-friendly country that straddles a major chokepoint in world fossil fuel transit.

This is important because Egypt can help mitigate some of the risk of Iran's threats to the Strait of Hormuz, which leads out of the Persian Gulf.

The U.S. Department of Energy says Egypt is now the sixth-largest liquefied natural gas producer in the world, bursting to that rank just since 2005, when its first LNG export terminal came online. And Egypt holds 58.5 trillion cubic feet of proven natural gas reserves, so that power trade is just getting started.

What's more, T. Boone Pickens, a titan of the energy investment world, is backing LNG as an alternative transportation fuel as oil rises further and further. LNG has huge potential as an alternative fossil energy source going forward.

No wonder, then, that BP (NYSE:BP), Italy's Eni (NYSE:E), BG Group (OTC:BRGYY), and a slew of other international energy companies have gotten in on Egypt's LNG projects, putting them in prime position to take advantage of future oil development, too.

One Egyptian oil field has even been developed near el-Alamein in the Qattara Depression, where geological features that were treacherous to tanks have been a boon to oil exploration, since Qattara is mine-free.

Egypt's investment landscape is just as promising to those who know the terrain. The Egypt ETF, set to launch in the second quarter of this year, will be a magnet for investors who want a piece of the country's progress.

We'll be watching for direct plays as old mines are cleared in the northwest, and new opportunities are set in their place.

Regards,

Sam Hopkins