Saturday, June 18, 2005

Hope

The Capital Spectator: The kingdom of hope
Bucking conventional wisdom, the Saudi peninsula has been widely explored, and so the odds of any great new discovery of oil remains unlikely, Simmons warns. Meanwhile, the still-copious flow of oil from the Kingdom relies on aging super-giant oilfields. "There is a genuine probability that Saudi Arabia is now overproducing some or all of its key giant oilfields, and this introduces a risk of accelerated decline," he writes. Indeed, oilfields have a finite life. For a time, output increases, then peaks, then declines. Saudi fields must ultimately live, and die, by this law of oil drilling. The fact that the main wells that make up the bulk of Saudi output were abused in the 1970s suggests that time is running out.
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