Twilight in the Desert

By Gareth Brown

I'd been meaning to read Matthew Simmons much acclaimed, occasionally criticised book on Saudi Arabia's key super-giant oil fields, Twilight in the Desert, ever since its release in 2005.

It was the author's death in August that pushed the book up my 'to read' list. Twilight in the Desert is rightly recognised as having helped put peak oil into the public discourse.

Perhaps surprisingly, then, Simmons' book doesn't spend much time on alternative geographical sources of oil or, indeed, alternatives to oil. It's not an all-encompassing discussion of the peak oil problem – the problem being that our oil bounty took many millions of years to form and most of it will be gone a few hundred years after the oil age kicked off in 1859.

What the book is, though, is an outlet for Simmons' impressive research on the world's most important oil fields, found in a surprisingly small corner of the Arabian peninsula. This research has been pieced together despite a void of information coming from national oil company Saudi Aramco since its nationalisation 30 years ago.

One fact stood out to me more than any other – Saudi Arabia's (and therefore the world's) heavy reliance on one incredible super-giant oil field for its production.

By Simmons' estimates, the 290km by 50km patch of sand known as Ghawar has produced between 55% and 65% of the Kingdom's oil supply for each of the past five decades.

Ghawar has produced two to three times more oil than any other field on earth, and is estimated to provide 6-8% of the world's oil supply today. When investors and politicians talk about the Kingdom being the world's 'swing producer', knowingly or otherwise they're referring to the producing abilities of this incredible but ageing oil field.

Peak oil is inevitable. The world will surely adjust, painlessly or otherwise, when the world passes its peak daily production and starts an inevitable slide. This book opened my eyes to just how crucial this one field is to that peak.

Simmons made the case that Aramco is running into some usual and some unique problems with Ghawar's ageing. He also makes the strong case that, despite popular perception to the contrary, the Kingdom doesn't have bountiful alternative oil sources for when the Ghawar taps inevitably slow, be that today or 20 years from now.

Plateau Oil

Modern recovery techniques have changed the production profile of individual oil fields. Instead of a relatively quick ramp up followed by many long years of slow decline, production profiles end up looking more like a plateau, with a cliff at both the beginning and, crucially, end of major production.

The Cantarell field in Mexico, once one of the world's largest producers, is illustrative. Production at Cantarell peaked in 2003/04 at more than 2 million barrels per day. Today, it produces around 500,000 barrels per day. Modern techniques allow a more efficient depletion.

If, rather than tailing off into the desert sunset, Ghawar's production collapses one day, the world is in for an abrupt jolt toward the post-oil era. When decline eventually sets in at Ghawar, it seems likely that the world will have passed the peak of daily conventional oil production.

Whether that's something to be feared or whether innovation and market mechanisms will ensure a smooth transition is something intelligent individuals are bound to disagree on. Feel free to have your say below.