All oil fields decline. Saudi Arabian oil fields can be expected to decline in the manner of other well-managed super-giant oil fields. Saudi fields are not publically documented while most others are, so a collapse could come far sooner than is widely recognized.
The figure to the right shows the experience of eight famous giant and super-giant oil fields. [Click to enlarge.] I found this figure in a new book (2005), "Twilight in the Desert: The coming Saudi oil shock and the world economy", by Matthew R. Simmons. Simmons suggests that when oil-fields decline, they do so at a rate of 50% per decade. On each oil field I have sketched a red line with that slope. Please examine Alaska's Prudhoe Bay oil field. It is a textbook case, producing at the maximum safe rate until the rate becomes controlled by nature instead of by man. If you are an American you should know that Prudhoe Bay is the bulk of Alaskan oil. You should notice how far down we have already come. Oseberg and Gullfaks fields are well managed by Norwegians, Brent field by Dutch, Forties field, by British. Russia's Romashkino field is similar. Slaughter is a Texas oil field. Russia's super-giant Samotlor began a catastrophic decline in 1987. (The Soviet Union collapsed three years later, perhaps not coincidentally.) [Notice both axes are scaled differently for each oil field.]
Economists often note that the world's biomass of mice exceeds its biomass of elephants; and something likewise holds for many mineral resources. Simmons expects nothing of this sort in Saudi oil fields. The preponderant volume is in the big fields. The figure to the left tells the story. [Click to enlarge.] I took this figure from Simmons' book and circled with blue the world's biggest oil field, Saudi Arabia's Ghawar field. The three fields circled in green are also "super-giants" but altogether they produce less than Ghawar. The only sizeable oil field found in Arabia since 1967 is the Hawtah Trend fields which I circled in red. Notice how small the red area is compared to the blue and green.
Failure to find any more oil than the Hawtah Trend since 1967 was not for lack of trying. Saudi ARAMCO has access to ample capital and the world's top talent. Exploration technology has seen major developments since then, but technology does not guarantee results. In 2005 ARAMCO's budget for exploration and development is $2.7 billion. Alaska's Prudhoe Bay is a clear example that while new technology may add something, it cannot keep up with depletion, even with the recent runup in prices.
Of course there is much more to an oil field than its area shown by this map. Simmons' book provides us with much such information that he has distilled from 200 papers published with the Society of Petroleum Engineers. ARAMCO ceased publication of production statistics by oil field when it was nationalized in the late 1970s, but their engineers continue to publish technical papers on problems, successes, and difficulties.
Alarmingly, the development of horizontal drilling has added nothing to reserves while hastening the speed at which they can be drawn down.
Saudi secrecy has led to a world-wide mystique that the Saudi oil fields can easily handle world needs for many decades to come. Simmons discredits this myth of an oil glut. Indeed it irks him. He blames it for two decades of underinvestment. I'd also blame it for two decades of profligacy.
During the 1978 oil crisis, ARAMCO provided the US congress with the information that 93% of its production came from just four oil fields, Ghawar, Safaniya, Abqaiq, and Berri (circled in blue and green). For almost four decades these four fields yielded 80-90% of Saudi oil production while three or four smaller fields made up the remainder. All these fields reached their maximum prudent level of production decades ago. In a crisis they could probably reach these levels again, but such levels could not be sustained and would damage the fields.
Late in the book Simmons recounts many recent SPE papers demonstrating huge amounts of previously ignored reservoir heterogeneity (variation from place to place). Even million-parameter models do not do a satisfactory job of reservoir forcasting. This casts doubt on all predictions, especially those of previous decades.
[Unsaid is where the million-parameter models come from. Either they are figments of someone's imagination, or someone must estimate these parameters from production history and 4-D seismic data. If my graduate students can make a dent here, I see employment for 90 years.]
You'll be better off reading Simmons' book than getting my personal opinion. I am 67 years old, born the year oil was found in Arabia (1938). My prediction for 67 years in the future is that Saudi oil production, as well as world oil production, will be a dim shadow of its present self. Simmons' book should be required reading for anyone teaching high school or college in Saudi Arabia or anywhere in the oil-producing world. Arabians have among them people who lived 67 years ago. What were their lives like? Preparation for oil decline will be a mercy for their grandchildren.
As for the rest of the world, we may not like it, but we can live with greatly reduced amounts of oil and gas. When I was a child we heated our homes with coal. I carried out the ashes. The engine of the train that went past my house also burned coal. Now we have other options for energy including nuclear, wind, and solar. For transportation fuel, we will mine the tar sands of Canada and Venezuela -- and pay a much higher price.
The collapse of oil is inevitable but it might not be precipituous. The world oil economy might not collapse at 50% per decade, nor should Saudi Arabian exports. Both Arabia and the world have many oil fields. Each field has its own appointment with fate, that time when its inexorable decline begins. As prices rise, conservation begins, first among the poor, eventually by everyone.