i have known Ali (the author of the piece) for a long time. And what he says, within context, is true.  (And sometime in the future I hope to get around to explaining in more detail some of the production techniques he mentions).  But what he misses is the volume part of the equation.  If a well is producing 10,000 bd with a 30% water cut, it is producing 7,000 bd of oil.  When that water:oil ratio rises to 1 then it is producing 5,000 bd oil, and when it rises to 12 then the well is producing only 769 bd.  To sustain production you have to drill more wells, and you are probably putting these as either infill or step-out from the existing ones so that the field will already be flooded (and you are hoping to take advantage of that for your production).  The problem is that with maximum reservoir contact and intelligent well control (the valves in the wells that were shown in that post) you get the production by draining the field out several kilometers per well.  Thus your well spacing increases (I have explained earlier that with a conventional well it is about 400 yds).  Thus you can only put a lower density of wells into the field.  Thus the theoretical argument for long term production,  applied from the case of conventional wells (of which there are thousands over Texas to get that production) cannot be applied to the MRC well case.
huh! i didnt realize that they are including water in the production figures. where's that guy with the car that runs on water when we need him?

okay, so i'm assuming that a MRC operation involves lots of horizontal pipe. do they drill vertical monitoring wells to give you some warning about the rising water? you dont want the whole damn line going down at the same time without warning, do you?

and if the water level is getting too high, can you back off on the water injection and hope more oil comes into the reservoir, or is it curtains once the water gets too high?

Increasingly they monitor the activity using 3-D and 4-D seismic techniques (the fourth dimension being time).  I had a reference to that somewhere relating to Ghawar and I'll see if I can't dig it out.  

Unfortunately as we have discussed before (and I will again in a couple of Saturdays as I get more into horizontal well development) once you get much water into a horizontal well then it is done.  There are a couple of remedial measures you can apply (multiphase pumping and intelligent valve control) but these are very expensive to put in, and I think that IWC has only just been tried for the first time at Shaybah as Ali mentions - though it has always been part of the plan for Haradh (which will see an increase of 300,000 bd at the beginning of next year

The $280 million Haradh-3 project aims to increase production capacity at the Haradh oil field to 900,000 bbl/d by February 2006. This will involve adding a third, 300,000-bbl/d GOSP to Haradh (in addition to two other 300,000-bbl/d GOSPs, one of which was inaugurated in January 2004). Haradh also will produce significant volumes of non-associated natural gas, natural gas condensates (perhaps 170,000 bbl/d), and sulfur.
. I got the quote from the EIA country brief, in which it also mentions that Shaybah is now looking to increase production another 300,000 bd, which has not otherwise appeared on any  published plan that I have seen, but may be the South Shaybah develpment that Ali is talking about.
What about Kenneth S. Deffeyes observation that the oil bearing rock in Ghawar has dolimite lime steaks that will affect the rate at which oil can be drawn from the reservoir using water injection http://www.princeton.edu/hubbert/current-events-04-06.html
It depends, relative to the overall formation permeability, vertical and horizontal, where the streaks lie in terms of the horizontal bores,
From this table you can see that there are 129,000 producing wells in Texas, and you can also read off their production data.
okay, so texas is pumping 7.3 barrels per day from each of 129,000 wells.

to give us an idea of the scale of this, there are reports that the saudis are injecting 7 million barrels of water a day into ghawar.

another report says they're injecting 500,000 barrels of sea water a day into Haradh to get 300,000 barrels per day of oil back out.

are those figures anywhere close to the truth, or does anyone know?

Ali seems casual about the water cut, stating that the Saudi cut is not exceptional and giving examples of Texas production continuing with much worse water and pressure issues. However, his argument is off the mark. He's not replying to Simmons' central points. Of course production continues, but at much lower rate. Despite new finds and new technology, Texas production peaked in 1972 and continues to fall. This is what Simmons is concerned about happening in Saudi Arabia. If anything, Ali's point proves Simmons' concerns. As pressure drops and water increases, oil production declines despite technology, and you have your peak.
So essentially he cites three regions which are well past their prime (Texas, Alaska, North Sea) as examples why he is confident that the Saudis can fulfill their claim that they are going to be able to produce "15 million for 50 years" (that would be 270 billion barrels btw.) if necessary. Quite convincing indeed...