Realmoney.com oil columnist Chris Edmonds is touring the Mideast now and has some interesting things to say. He is writing a series of articles as he goes from country to county: Oman Qatar, Dubai, etc. KUDOS TO IAN AND STUART RE ITEM #2 on his list!! Sorry for the caps and exclamations but they deserve all the kudos I can give. Here's the link for his Bahrain diary (sorry this is a pay site); as a subscriber I found each entry to be fascinating. http://www.thestreet.com/p/_rms/rmoney/oil/10386510.html

Here are his conclusions based on a week of Mideast travel.
1. Of the top 38 oil fields in the Arabian Gulf, 41% of the reserves are depleted. While there were originally 605 billion barrels, today there are only 360 billion barrels left, many of which will be difficult to recover.
2. The world's largest oil field, the Saudi Ghawar field is over 55% gone with recovery of the remaining 45% significantly challenged and much more expensive.
3. Kuwait's Burgan field, the second-largest field in the world, is in steep decline. While Kuwait says it can boost production to 2 million barrels per day, anything above 1.7 million bpd appears unlikely.
4. While Iran says production should reach nearly 5 million bpd between 2010 and 2015, credible estimates suggest production of 3.8 million bpd today is likely close to peak production. Projects suggest production by 2015 will likely be lower than current levels.
5. Global oil reserves are likely overstated by at least 300 billon barrels.
6. All major oil fields in the Arabian Gulf have been discovered. While incremental discoveries are possible, future new production will likely come from small fields that are less productive, incrementally more costly and potentially more prone to rapid depletion.
7. The one area of potential hope is the Red Sea which has not been explored and developed. However, drilling is more expensive and technically challenging than the Persian Gulf and onshore Arabian Peninsula.

Regarding the Red Sea, Edmonds states that a shortage of trained E&P personnel will constrain its development. Elsewhere in the series he states that oil companies have been very cautious with their exploration budgets, whereas in the early 80s they burnt themselves by borrowing too much money to finance exploration that in turn led to the mid-80s oil market collapse. This time, says Edmonds, it is different. With restrained exploration activity in place so far, he sees continued oil price appreciation, even entitling one of his diaries, "The Certainty of $100 oil." Also, re item #6, Edmonds says that much of the so-called "new" Mideast projects that come on stream are in fact workovers; he also concurs with posters on this site that much new Saudi supply is sour crude. Nice to have the great work done here confirmed by a prominent industry insider/ journalist like Edmonds on the qround -- and sobering as well.