The Yibal field is 35 years old. In the oil industry, there are a variety of approaches to enhancing production. Water injection is an old one. Steam injection is also an older technique, used to thin extra heavy oil so that it will flow more easily into the well shaft. For 30 years, the producers used water injection in Yibal to maintain the pressure in the reservoir to produce a high yield from the wells. Pushing as well as pumping, as it were.

From 1980 to 1997, Yibal production rose strongly. In 1990, it embraced the use of horizontal drilling technology.

The popular view of an oil well is of a vertical shaft dropped into the ground like a straw into a glass. During the last ten years, however, technology developed to allow cost-effective and efficient horizontal drilling. This allowed the well shaft to run horizontally through the oil reservoir, enabling higher production from the resource. Subsequent to that, the industry developed the ability to create multilateral wells, maximizing contact with the reservoir. Here's a visual from Saudi Aramco, the Saudi Arabian national oil company. You can see the difference in the production volumes.

In 1997, production at Yibal peaked, and the yield began to decline. Two papers written last year by Petroleum Development Oman officials show that production in Yibal dropped at an annual rate of about 12 percent for six years. The two papers adduce different production data.

The first described a decline from 251,592 barrels a day in 1997 to 88,057 barrels a day by 2000. The second described a peak of 225,000 with a drop to 95,000.

Another one of the problems from Yibal according to the NYT :

In the case of the Yibal field, for example, Shell and Omani oil engineers and auditors have expressed concerns that a technique Sir Philip said would recover more oil not only did not do so, but also increased the amount of water in the extracted oil to as much as 90 percent of the total volume, increasing production costs.

This situation maps almost exactly to the concerns voiced by Matthew Simmons, head of Simmons International, about the big 5 Saudi oil fields -- i.e., that the fields may be close to peak production, and that water drive and other enhanced production techniques have been used to the point where the reservoirs are straining.

It also highlights a tension in production strategies. Do you strive to maximize output to meet demand -- or do you throttle back on production to prolong the life of the field?

But some insight into Oman's views are contained in remarks made a few years ago by its minister of oil and gas and another director of Petroleum Development Oman. The remarks were published in the venture's newsletter and posted on Shell's Web site. "We have been too preoccupied with trying to get that extra barrel" now, said the minister, Mohammed bin Hamad al-Rumhy, "rather than formulating a plan for the long term."

We should factor this element into our consideration of the OPEC situation. The producing nations may be trying to cut back to ease the stress on their fields. That oil is basically the only resource they have. Once the fields peak -- what are those nations going to do? Adding economic collapse on top of Islamist radicalism will create an even more volatile, toxic stew.

From a consumer’s point of view, there is not a good resolution to the production question. Scaling production back drives prices up. Strains on supply drive prices up. And technology does not provide a guaranteed silver bullet. (Although, again, to emphasize: without the advances in oil field technology and deepwater drilling that we already have in place, the supply situation would be even tighter. Technology does work -- but it has its limits, as shown in the Yibal situation.)

Background: The Saudi Arabian Oil Miracle. Presentation by Matthew Simmons. Simmons is publishing a book this spring on his analysis of the Saudi oil market. Look for it.