Peak Oil is on the agenda again this week with a public forum at The Grove Sports Club with Wally Wight a leading speaker from the Association for the Study of Peak Oil and Gas.

It got me motivated to start reading a book I picked up at Lifeline Bookfest: Twilight in the desert: the coming Saudi oil shock and the world economy by Matthew Yimmons.

This is a remarkably readable book for what I thought would be a dry technical subject. It starts off with the amazing history of Saudi Arabia and the early discovery of oil there.

Let me share two bits with you.

Firstly are the names of the five super-giant Saudi oilfields that have dominated all our lives yours and mine without most of us knowing anything about them and how they are the absolute foundations of all our wealth.

These super-giants are Burgan (Kuwait now exhausted) Kirkuk (5 decades accounting for 50-70% of Iraq’a oil production) Gach Saran (1935 in Iran peaking in the early 1970s) Agha Jari (1944 in Iran peaking in the early 1970s) Dammam 7 (Iraq flowing from 1938 to 1982) Abqaiq (Iraq 1940 meaning ‘father of a sand flea’ perhaps the best oilfield the world has ever known in terms of size productivity and the extremely high quality of the crude it produced. Abqaiq is past-peak) Ghawar (the biggest of the lot by far first penetrated at Ain Dar #1 in 1948. Ghawar is now described as specific fields – Shedgum Haradh Hawiyah Fazran Uthmaniyah. Ghawar is past-peak.) Safaniya (producing ‘sweet’ crude). Berri (Saudi past peak).

The last oil field of any great (not super-giant) size discovered was Shaybak found in 1968 and part of what is called the Hawtak Trend.

The oil fields of Saudi Arabia are in one part of Saudi Arabia in the north east clustered together.

Saudi Arabia has been an extremely reliable proprietor of the world’s most critical oil supply. It has been a ‘dove’ in policy disputes working to maintain fair oil prices and safe reliable oil supplies.

Saudi Arabia produces 13% of the world’s oil and has 23% of the world’s proven reserves (as provided in unsupported statements without backup evidence).
In 1933 when it was all starting oil cost US$0.10 per barrel.

The world only started to develop a ravenous appetite for oil in the 1950s.

Saudi Arabia contains an alarming example of how natural resource wealth fuels population growth and how population growth fuels poverty.

Early on the Saudi economy was flush with vast amounts of excess cash in the days when prices were high and only 6-9 million people lived in the Kingdom. With this wealth the government was able to provide many social services such as health care education electricity and water either free or at heavily subsidized prices.

The Saudi population subsequently soared with a birthrate of an astonishing 6.3 children per female. The population exploded to past 30 million in 2010 and will be close to 50 million in 2030 or even higher.

Today the Saudi economy bears no resemblance to the wealth and splendour many in the West assume exists. Saudi Arabia’s government DEBT at the end of 2003 totaled about $170 billion. On a per capita basis this represented more debt than Argentina. By 2003 the Kingdom has run budget deficits for 19 of the past 20 years. Its GDP per capita is now less than $8000 annually about half Spain’s.