Twilight in the Desert

Twilight in the Desert reveals a Saudi oil and production industry that could soon approach a serious, irreversible decline. In this exhaustively researched book, veteran oil industry analyst Matthew Simmons draws on his three-plus decades of insider experience and more than 200 independently produced reports about Saudi petroleum resources and production operations. He uncovers a story about Saudi Arabia’s troubled oil industry, not to mention its political and societal instability, which differs sharply from the globally accepted Saudi version. It’s a story that is provocative and disturbing, based on undeniable facts, but until now never told in its entirety. Twilight in the Desert answers all readers’ questions about Saudi oil and production industries with keen examination instead of unsubstantiated posturing, and takes its place as one of the most important books of this still-young century.

Illustrations ix

Preface xiii

Acknowledgments xxi

PART ONE FROM BEDOUIN TO BOURGEOISIE 1

1 The Birth of a Nation 5

2 The History of Major Saudi Arabian Oil Discoveries 23

3 Saudi Arabia's Road to Oil Market Dominance 43

4 The Veil of Secrecy over Saudi Oil Reserves and Production 69

PART TWO THE EBBING OF THE SAUDI OIL BOUNTY 99

5 Saudi Aramco 101

6 Oil Is Not Just Another Commodity 129

PART THREE GIANTS AT THE TIPPING POINT 149

7 Ghawar, the King of Oilfields 151

8 The Second-Tier Oilfields 181

9 The Best of the Rest 199

10 Coming Up Empty in New Exploration 231

11 Turning to Natural Gas 245

PART FOUR TWILIGHT IN THE DESERT 261

12 Saudi Oil Reserves Claims in Doubt 265

13 Facing the Inevitable 281

14 Reading Between the Lines of the Latest News from Aramco 309

15 Aramco Invokes "Fuzzy Logic" to Manage the Future of Saudi Oil 325

16 In Search of Crisper Truths among the Confident Saudi Claims 333

17 Aftermath 341

Appendix A Methodology 355

Appendix B Supporting Technical Data 365

Appendix C The 1974 and 1979 Senate Hearings 377

Notes 385

Bibliography 391

Index 409

"Those who follow with their own tales of imminent economic collapse struggle to emerge from [Simmons'] shadow." (Spectator Business, October, 2008)

"...this is an important book and worth reading" (The Royal Society for Asian Affairs, April 2006)

"The author...is clearly an expert in his field.... I recommend anybody in the financial markets read this book." (Financial Engineering News, October 2006)

MATTHEW R. SIMMONS is Chairman of Simmons & Company International, a Houston-based investment bank that specializes in the energy industry. He now focuses on research, writing, and speaking engagements. Last year, he gave seventy-five speeches to a variety of groups, including energy industry conferences, university symposiums, and think tanks. Mr. Simmons is a member of the National Petroleum Council, a board member of Resources for the Future, and a Trustee of The Atlantic Council of the United States. He has an MBA from Harvard University. Praise for TWILIGHT IN THE DESERT

"This book is likely to be the most important ever written about oil."
—The late Richard E. Smalley, PhD, Nobel Laureate in Chemistry, 1996 Former University Professor, Gene and Norman Hackerman Professor of Chemistry, Former Professor of Physics, Rice University

"[Simmons] effectively confronts the complacent notion that there are ample oil reserves in Saudi Arabia. Twilight in the Desert should provoke anyone who believes that the recent increase in oil prices reflects either a speculative bubble or short-term supply constraints."
—Edward L. Morse, former deputy assistant secretary of state for international energy policy

"Everyone must understand this thesis, whether you agree or not,since it may change life as we know it."
—Jim Rogers, author of Hot Commodities and Adventure Capitalist

"Matt Simmons's book is a challenge to Middle Eastern oil producers to provide the world with more and better oil field data . . . If Simmons proves directionally correct, we are in for a huge and early challenge to find alternative transportation fuels."
—Dr. Herman Franssen, President, International Energy Associates, Inc.

"Provides much-needed transparency to a subject long hidden from public view. While all may not agree with its findings, it is the ensuing debate surely to follow that gives value to the author's efforts."
—Robert E. Ebel, Chairman, Energy Program, Center for Strategic and International Studies, Washington, DC