Matt Simmons: Saudi Oil Likely Peaking

Matt Simmons, in his latest PDF presentation, claims to have the "smoking gun" indicating Saudi oilfields, including the supergiant Ghawar field, are about to go into steep decline, and may already be there. The gun he refers to are the obscured findings of the 1974 Subcommittee on Multi-National Corporations of the Comittee of Foreign Relations Hearings, United States Senate, and the 1979 Staff Report to the Subcommittee on International Economic Policy of the Committee on Foreign Relations, United States Senate. The latter he says are "33 pages of garbled text concealing 'the smoking gun'", which is that Saudi Arabia damaged their principle oilfields in the 70's, which will limit the amount of hydrocarbons ultimately recoverable. From his slide "Key Issues Which 'Twilight' Spells Out":

• Saudi Arabia does not have an inexhaustible oil supply.
• Four to five key fields provided 90+% of its oil output for [the] past 40 years.
• Three lesser fields made up almost everything else.
• Real proven reserves were 110 billion barrels in 1979 (and 77 billion probable reserves).
• Since then, oil produced totaled 63 billion barrels.
• Traditionally, once 50% of recoverable reserves are used, production begins to decline.

In a related presentation Simmons gave at the Center for Strategic & International Studies, he says that "vertical wells in Saudi Arabia now appear to be obsolete". The signficance of this is that it means the easy to get at stuff has vanished, and "they drain the last thinning columns of easy oil". Since "technology led to the production collapse in Oman's Yibal field", that Ghawar is taking a similar route is ominous for the world.