Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy [Paperback]

Matthew R. Simmons (Author)

Book Description

Publication Date: June 5, 2006

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.

Editorial Reviews

From Booklist

Investment banker Simmons offers a detailed description of the relationship between Saudi Arabia and the U.S and our long-standing dependence upon Saudi oil. With a field-by-field assessment of its key oilfields, he highlights many discrepancies between Saudi Arabia's actual production potential and its seemingly extravagant resource claims. Parts 1 and 2 of the book offer background and context for understanding the technical discussion of Saudi oil fields and the world's energy supplies. Parts 3 and 4 contain analysis of Saudi Arabia's oil and gas industry based on the technical papers published by the Society of Petroleum Engineers. Simmons suggests that when Saudi Arabia and other Middle East producers can no longer meet the world's enormous demand, world leaders and energy specialists must be prepared for the consequences of increased scarcity and higher costs of oil that support our modern society. Without authentication of the Saudi's production sustainability claims, the author recommends review of this critical situation by an international forum. A thought-provoking book. Mary Whaley
Copyright © American Library Association. All rights reserved --This text refers to the Hardcover edition.

Review

"...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)

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

See all Editorial Reviews

Product Details

• Paperback: 464 pages
• Publisher: Wiley (June 5, 2006)
• Language: English
• ISBN-10: 0471790184
• ISBN-13: 978-0471790181
• Product Dimensions: 9.2 x 5.8 x 1.2 inches
• Shipping Weight: 1.3 pounds (View shipping rates and policies)
• Average Customer Review: 4.2 out of 5 stars  See all reviews (110 customer reviews)
• Amazon Best Sellers Rank: #121,246 in Books (See Top 100 in Books)
  • #71 in Books > Business & Investing > Industries & Professions > Oil & Energy

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Customer Reviews

Most Helpful Customer Reviews

225 of 239 people found the following review helpful:

5.0 out of 5 stars bad news from the SPE, via a Texas investment banker, June 16, 2005

By 

R. Hutchinson "autonomeus" (a world ruled by fossil fuels and fossil minds) - See all my reviews
(VINE VOICE)    (REAL NAME)   

This review is from: Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy (Hardcover)

Matt Simmons has bad news about Saudi oil, very bad. Who is Matt Simmons? He's a Houston investment banker who specializes in oil. He's a member of the National Petroleum Council and the Council on Foreign Relations. Not a radical environmentalist, in other words, quite the opposite. What Simmons has done in TWILIGHT IN THE DESERT: THE COMING OIL SHOCK AND THE WORLD ECONOMY is to analyze the technical papers of the Society of Petroleum Engineers (SPE) on Saudi oil, shining a light behind the veil of secrecy that has shrouded it since OPEC stopped reporting oil production data in 1982. In short, what the SPE reports reveal is that the official Saudi claims for reserves and production capacity are vastly overstated. Further, tragically, it seems that the fields have been mismanaged, making it unlikely that all the oil will ever be recovered.

Now someone with a suspicious mind might suspect that Simmons, a banker, has an interest in leading the market to believe that oil is scarce, because that will put upward pressure on the price, and the oil companies and he, their banker, will benefit. I do have a suspicious mind, but I am convinced by Simmons's meticulous presentation of the SPE data. It is probably the single most important piece of evidence that the world is entering the Hubbert's peak for oil ("peak oil" as it is colloquially and ungrammatically known). He systematically presents the data on every single big Saudi oilfield, from the biggest of all, Ghawar, which as of 1994 still produced 63% of all Saudi oil, through Abqaiq, Safnaya, Berri, Zulaf, Marjan, Shaybah, and smaller fields.

Are there vast untapped reserves in Saudi Arabia? According to the SPE data, the answer is no. No giant fields have been discovered since 1968, despite intensive exploration. Here is a list of crisp facts about world oil, according to Simmons (p. 331):

1) Only a handful of super-giant oilfields have ever been discovered in Saudi Arabia and the Middle East -- they represent a very significant portion of all ME oil, and they are all very mature.

2) All mature giant oilfields peak and decline (production profiles showing the peaks are shown for 8 fields in Texas, Alaska, the North Sea, and Russia). Implication: sophisticated new technology will not prevent or forestall this from happening.

3) There do not seem to be many giant oilfields left to be discovered in Saudi Arabia or the ME.

4) Non-OPEC oil, excluding the FSU (former Soviet Union) seems to be peaking, or has already peaked.

The consequences of all this, needless to say, are grim. It's been increasingly clear in recent years that oil had peaked everywhere else, but there was still supposed to be a vast reserve under the Saudi sands. Apparently this was a mirage. What this means is that we have to make the development of new energy sources the top priority! Of course, in the middle to long-term, it will have to be renewable energy, and the faster we move to solar, wind, and biofuels the better (See Hermann Scheer's excellent THE SOLAR ECONOMY.) In the transition, which is likely to be a rough ride, other less desirable alternatives are all but inevitable. Balancing available inputs (ie, plentiful coal) with toxic outputs and global warming will be a Faustian bargain. One thing we must demand here in the U.S. is an immediate major increase in the CAFE -- corporate average fuel economy, the standard for fuel efficiency. There is no reason it shouldn't be raised to 40 MPG in a few years. CAVEAT EMPTOR!

For more vital resources on this topic, see my THE CLEAN/RENEWABLE ENERGY REVOLUTION list.

124 of 133 people found the following review helpful:

5.0 out of 5 stars What If The Pumps Run Dry, June 12, 2005

By 

John G. Hilliard (Toronto Canada) - See all my reviews
(REAL NAME)   

This review is from: Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy (Hardcover)

The basis of this book is fear, not unwanted fear spread by the author, but it is the emotion you start to feel as you move through the book page by page. For good or bad the U.S. and the world have become reliant on one natural resource that is controlled by a very few countries and people. This fact alone should have most of us concerned, 60% of the oil we use each day is controlled by a bunch of countries that are primarily dictatorships surrounded by people that would sooner burn the oil in mass dumping grounds instead of selling it to us regardless of the price. We have become backed into a corner and it appears that our only response so far as been to flex our power.

What will happen if the oil fields in Saudi can not keep up with demand? What if the production facilities are almost overmatched at this point and further facilities are difficult to put in place? All of these and more questions are covered in this book. The author also talks about the populations and political situation in Saudi and the picture he presents is another difficult and concerning one at that. One can only hope that the production in Iraq gets up and running or that better technology is hurried into production.

The footnotes and documented sources detailed in the book give it the appearance of a very well documented and accurate study. The details on the production process in Saudi is worth the price of the book alone. It is a rather back handed slight at our news media that the very real issues presented in this book have not yet made it to the talking heads at 6 pm. Overall I enjoyed the book a great detail. It is well written and put together. The reader is never lost in the detail no matter how little previous knowledge the reader has about the oil business. What I found was that the good was a very fast read given that it is difficult to put it down. It is a book that we all need to read.

34 of 34 people found the following review helpful:

5.0 out of 5 stars Well Written - Very Detailed, November 27, 2005

By 

J. E. Robinson - See all my reviews
(REAL NAME)   

This review is from: Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy (Hardcover)

This is a well written and well researched book by Mathew Simmons, an expert on the oil business including Middle East oil supplies. The book is a bit technical and is mostly solid information on oil extraction, the oil fields of Saudi Arabia, along with a number of projections. The best comparison that I can make is with a university reference book, but not a text book: it is a well written reference book with a very short introduction of Saudi history.

The book is a little over 400 pages in medium font, and has many maps showing the locations of the oil, schematics showing how the crude oil is actually processed, photographs, and a number of tables. There are about a dozen large oil fields in Saudi Arabia. These fields are discussed, and comparisons are made with other large active oil fields around the world, including the North Sea oil fields started in the early 1970s. The core idea of the book is that we are about to face the reality of limited oil production in Saudi Arabia and in the rest of the Middle East: the situation is not good and projected inventories and extraction rates are too optimistic. The era of growing sources seems to be over, regardless of the political situation in the Middle East. The sources cannot keep up with the demand for oil that is expected to continue to grow.

The book is divided into four sections and then has a very short appendix. The first section is just 69 pages and details the political and historical development of Saudi Arabia as a country, and the introduction of foreign oil companies.

Section two is short, just 50 pages, and covers the subject of how the oil is extracted from the ground, and what has to be done to separate the crude from water, methane, and various other contaminants to get "pure oil". This includes photographs and a number of process schematics. It goes step by step through from the discovery of a field to how the oil is actually extracted and processed, and this can differ for different stages in the life of an oil field.

Section three is the heart of the book. It is a long inventory and description of about a dozen Saudi oil fields with maps and comments. This is one of the biggest sections and takes up 110 pages. He goes through the inventory field by field explaining the size, location, problems, yields, lifetimes, etc. This is a relatively complete description of the Saudi oil situation and oil around the Middle East, in more general terms for the latter and a bit less detailed.

The last section is about 100 pages and he describes the life cycles of various oil fields to show how the oil extraction rate varies with time. Each field goes through a life cycle, sometimes lasting decades, but each has a finite cycle length and each follows a similar production trajectory, i.e.; a slow rise in output at first to a maximum rate, then a peaking, then a drop off. The author has a lot of detailed information on many oil fields from around the world, along with their production histories. Most fields around the globe are on the down slope.

Finally, he has a brief appendix with additional comments to show that the problem with the Saudi fields is an old problem, and he quotes past Congressional testimony and similar, going back from 1974 that back up his present case. The problem is not new. Saudi production is limited and the inventory figures are overly optimistic, and they have a history of being overly optimistic: production is just half of old projections, and raising production levels is not feasible.

The general thrust of the arguments is that the fields are running at near capacity, will peak soon, and then drop off. They will not last centuries or similar. The date is a bit hazy, but with exponential growth in demand it will be sooner rather than later, probably the first decade of the present century, or maybe even this year or in the next few years. At that point we will not be able to meet oil demands, especially for the emerging nations of China and elsewhere.

In summary, once the hype and opinion clears away, and the basic facts are considered, the oil situation is not good. Many economists, most politicians, and the general public have still failed to grasp that an oil based economy cannot be sustained indefinitely because of finite supplies - not taking into account whether carbon dioxide will destroy the atmosphere. Like lung cancer and smoking, there has been a long period of denial and a lack of any real effort to conserve oil or find an alternative. In any case, this book drives the point home - in spades - and with much technical detail. We are about to peak in Saudi oil production, and there are no alternatives. The tap will not be 100% turned off, but supply will peak, decrease, and not the meet demand; our economies and the use of the gasoline, jet fuel, natural gas, or diesel fuel will have to change sooner, not later. Few think that coal is a good solution, and the much promoted two step "clean-coal" has yet to be demonstrated, i.e.: step one works - the high temperature burring of coal, but step two, an effective method of sequestering the carbon dioxide is not proven. The latter is my comment.

This is a well researched and well written book that outlines serious future oil shortages. 5 stars.