Ghawar down 8% - is this the beginning?

For some foolish reason, I assumed that all 10 or 12 thousand of you readers out there knew this, but Ghawar (the super giant of super giant oil fields, 60% of Saudi Arabia's total output, 4x as large as the next largest super giant, 6% of all oil in the world, etc.) is clearly past peak (ie. on a decline). They're down about 8% from the beginning of 2006 to the end of 2006.

Why do you care? There's a real chance this might be the beginning of the end. Saudi Arabia has long been the "swing" oil producer. They could up production (ie. extraction), cut it, etc. whenever they wanted to impact the price of oil. They lead OPEC. Ever since the early 70's, they have take the place of the U.S. in terms of oil producers. They are the man.

But with Ghawar declining, things could turn chaotic. The changing of the guard back in the early 70's sure as hell did - look at the gas shortages and what-not. And even if that doesn't do it, market forces surely will. I believe this means that every super giant is in decline (the only one I'm uncertain about is Durgan in Kuwait).

And for Ghawar, just as we've seen with other past peak super giants, the declines will likely be severe and rapid. There won't be a nice and easy plateau like CERA and others will have you believe.

Of course Saudi Arabia keeps all this a "state secret," so there's no admission of what's happening. They could just as easily say, "We're cutting production intentionally." But why would it be so gradual? Why would it mirror the pattern of other past peak giants? Why would there be a blip up in production with the Harradh III project - in fact, why would they hurry so much to get it online? Why would this coincide with other information like massive water cuts being reported over the past year or more?

Easy answer: Ghawar is really in decline, and that's no line (sorry about that one, had to do it)

If you've been waiting to prepare, to investigate, to whatever - I suggest you do it right now.