Chapter 4 Summary and Analysis

As Saudi Arabia tries to limit oil production to protect its wells from the damages of overproduction, the United States government, concerned about the world's growing dependence on Saudi Arabia's oil, charges the United States Government Accounting Office (GAO) with investigating Saudi Arabia's ability to meet global oil demands. The GAO's report concludes that Saudi Arabia can, in fact, sustain its production levels assuming that high reservoir pressures are maintained and that the current practice of water injection to keep pressures high can continue. Unfortunately, neither of these assumptions proves to be correct. Less than a year after the GAO report is released, a report to the United States Senate Subcommittee on International Economic Policy of the Committee on Foreign Relations is released. The report includes production levels at each of the key areas of Ghawar, Saudi Arabia's most productive reservoir...