Saudi Oil: No Second Act

Some very unpleasant information about peak oil comes via Just a Bump in the Beltway: the source is old, from last August, but I hadn't seen it cited before now. Matt Simmons, founder of one of the world's largest energy investment groups and with thirty years of experience in the field (and author of the forthcoming Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy), has analyzed Saudi oil production and is convinced that it's near or even likely past its peak. Particularly ugly is what Simmons has to say about the way the Saudis have historically managed extraction:

Normally, ... Saudi fields would be subject to the same decline curves as those experienced by any of the world’s oil fields, once reservoir pressure begins to dwindle. The difference is, he said, Saudi Aramco doubled up to catch up, almost from the start, by keeping reservoir pressures — and individual well flow rates — as high as possible, seemingly for as long as possible.

In simple terms, says Simmons, the Saudis have produced their fields under simultaneous primary and secondary recovery, having instituted huge waterflooding programs relatively soon after completing field development.