Matthew Simmons In Denver - Saudi Production On The Bubble

[hatrack]

"Saudi Arabia, the world's safety valve for oil, may soon lose its ability to make up production shortfalls from other countries.
That's the warning delivered in Denver on Monday by energy analyst Matthew Simmons. Saudi Arabia's presumed ability to bring more oil to market is often mentioned as the antidote to record high prices for oil and tight supplies.

But Simmons said prolific Saudi oil fields show signs of peaking and then gradually declining. Simmons, chief executive of Houston-based energy investment banker Simmons & Co. International, spoke to the Desk & Derrick Club of Denver, a petroleum trade association.

"They're taking the last of the easy oil out," Simmons said of Saudi oil producers. "They've had very little success in new exploration. Their sweet spots are probably very nearly depleted."

EDIT

Simmons once was viewed in the petroleum industry as an alarmist for his projections about declining energy supplies, but many analysts now agree that high prices and tight supplies are here for the foreseeable future. Another widely followed energy analyst, Colin Campbell, has predicted that world oil production will peak by next year. Other analysts, however, say high oil prices will prompt new exploration and technology that will satisfy growing global demand for petroleum. Simmons won't predict how far prices will rise or when global production will peak, although he thinks it will occur before 2010."

EDIT

http://www.denverpost.com/Stories/0,1413,36~33~2461430,00.html

[phantom power]

1. A colleague of mine has a brother who made his money

by predicting the economic return on oil fields, based on geologic survey data. Apparently, his models are better than anybody else's (I get the impression he made quite a *lot* of money).

So, I played six-degrees (or, 2-degrees), and asked my friend if his brother had an opinion on Simmons and his predictions.

The response was (and I quote): "Matt Simmons is a smart guy and I agree with his positions on World oil supply."