However, an increasing number of industry analysts feel that this indeed might be the case. Those who believe this to be true point to the situation in Saudi Arabia, the biggest oil producer for the past three decades. For quite some time, industry watchers have postulated that Ghawar, the biggest oil field in the world, has reached its plateau of production.
If you don't know anything about Ghawar, it is by far the largest conventional oil field in the world, measuring an estimated 175 miles by 20 miles. Currently, conjecture has it producing between 4.5 and 5 million barrels of oil per day by outside observers, which is over six percent of global production. The officially stated maximum sustained crude production capacity is 8.5 million barrels per day, though actual daily output is a closely-guarded state secret. Thus far, approximately 60 billion barrels have been pumped out of Ghawar since production began back in 1951.
Ghawar's total proven reserves, or recoverable oil still left in the ground, have been pegged at just over 70 billion barrels by Saudi Aramco, the nationalized oil company which is the largest of its type in the world. The word 'recoverable' is extremely relevant, as the entire amount of oil in the ground is less significant than the amount that can easily be harvested at a given level of extractive technology. While modern techniques can certainly boost the amount of oil that can be extracted per oil field, the question of how expensive the operation turns out to be remains extremely pertinent. Once oil extraction becomes too difficult, and therefore expensive, it becomes economically infeasible to attempt to remove the remaining supply.
Saudi Arabia is watched very closely because of its importance in the worldwide oil markets. It has long held the mantle as the world's largest producer of oil, and has acted as a 'swing producer,' regulating oil extraction rates to balance to the global market in concert with the other OPEC members.
A significant amount of worrying signs clearly indicate that Ghawar might be in permanent decline. Back in April 2006, a Saudi Aramco spokesman shocked listeners by making the observation that its first discovered fields are now declining at a rate of 8 percent per year. In other words, Ghawar's production is now most likely past its 'peak.' The spokesman went on to say that actions were being taken to offset the decline, but that the only valid solution to declining crude supplies is to locate new fields, and it is beyond debate that oil field discoveries have not kept pace with skyrocketing widespread demand.
If it becomes clear that Ghawar is indeed in decline, it likely means that the overall production around the world is as well. Of the 'super-giant' oil fields, four are officially past their peak production: China's Daquing, Mexico's Cantarell; Russia's Samotlor; and Kuwait's Burgan. Though Ghawar has not officially been so declared, one can infer as much, from the available facts.
Matthew Paolini is Citybook.com's technical director for the Baltimore, MD online Yellow Pages division.