The Saudi Oil Bombshell

"There is only a small probability that Saudi Arabia will ever deliver the quantities of petroleum that are assigned to it in all the major forecasts of world oil production and consumption," Simmons writes in Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy. "Saudi Arabian production," he adds, italicizing his claims to drive home his point, "is at or very near its peak sustainable volume ... and it is likely to go into decline in the very foreseeable future."

First, a few words about the author of Twilight in the Desert. Matthew ("Matt") Simmons is not a militant environmentalist or anti-oil partisan; he is chairman and chief executive officer of one of the nation's leading oil-industry investment banks, Simmons & Company International. For decades, Simmons has been pouring billions of dollars into the energy business, financing the exploration and development of new oil reservoirs. In the process, he has become a friend and associate of many of the top figures in the oil industry, including Bush and Cheney. He has also accumulated a vast storehouse of information about the world's major oilfields, the prospects for new discoveries, and the techniques for extracting and marketing petroleum. There is virtually no figure better equipped than Simmons to assess the state of the world's oil supply. And this is why his assessment of Saudi Arabia's oil production capacity is so devastating.

"The 'twilight' of Saudi Arabian oil envisioned in this book is not a remote fantasy. Ninety percent of all the oil that Saudi Arabia has ever produced has come from seven giant fields. All have now matured and grown old, but they still continue to provide around 90 percent of current Saudi oil output ... High-volume production at these key fields ... has been maintained for decades by injecting massive amounts of water that serves to keep pressures high in the huge underground reservoirs ... When these water projection programs end in each field, steep production declines are almost inevitable."
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