New book says Saudi oil output in decline

New book says Saudi oil output in decline, reserves overestimated

Edinburgh (Platts)--31May2005


Saudi Arabia, the world's biggest oil producing country, may have overstated
its crude oil reserves and might not be able to meet future demand for crude
because its oilfields are in decline, US analyst Matthew Simmons says in a
book just published.

Simmons, president of energy investment bank Simmons and Company
International, has for some time challenged the view that Saudi Arabia's oil
reserves, officially put at 262-bil bbl, are enough to ensure there will be no
real supply shortage on global markets in years to come. "It is impossible to
predict with any certainty just when the problems affecting Saudi Arabia's
oilfields will finally become insurmountable and send the kingdom's daily oil
output into an irreversible decline," Simmons writes in the introduction
"Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy.
"...not even the fuzziest logic can create a plausible scenario under which
Saudi Arabian oil production could increase to levels that would fulfill the
fantasies of the forecasters," he concludes.

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