Well I can certainly understand why the Saudi's or any OPEC country would want to keep oil alive. Especially with things like brain drain causing issues with the development of anything not oil related, and the knowledge that, sans oil, their prospects are incredibly dim.
The prospects post-oil are bad for the country, and worse for the leadership. I doubt that one university is going to do the trick. In the case of Saudi Arabia, they likely need to start with a complete overhaul of the education system, raising a new generation that is cultural and technically able to adapt to a post-oil scenario. Of course, the current Monarchical rule probably won't survive in any case.
Bad for the entire region -- insert statistics I don't have time to find for GDP of Middle East related and unrelated to oil. Oil GDP is massive, GDP of the rest is comparable to like a small Eastern European country. EDIT: and by bad I mean they are utterly and completely screwed.