The Arab Human Development Report (AHDR) for 2009 was finally released during a press conference in Beirut by the UNDP's Regional Bureau for Arab States, with the participation of a large group of Arab intellectuals. Given the importance of petroleum to the Arab human security, the AHDR was divided into specialized sections, including the ones dealing with petroleum-related issues (oil and gas): The Arab oil industry goes back to over half a century ago, and is today the most important and largest industry in the Arab world, employing no less than a million people, and hosting annual investments in the order of the tens of billions of dollars. Also, oil is expected to continue playing a central role in the Arab economy, and subsequently in the lives of Arab citizens for decades to come, and up until the end of this century. Despite the difficult challenges present in the Arab countries as well as the wars and unrests, this industry was still able to continue production and development operations, and to meet the terms and conditions in their supply contracts with no interruption. Thus, without any exaggeration, the balance between global supply and demand on oil has been maintained, and more importantly, the production capacity of the Arab oil industry has become a safety valve that is actuated during global economic and political crises, which at the time also maintained the balance of global supplies, preventing a big surge in oil prices. Nevertheless, there is considerable disagreement among Arab citizens on the importance of Arab oil and its role in local communities, and while some consider it as a blessing, others view it as a curse. Meanwhile, for the senior government officials, petroleum is a cash cow that generates billions of dollars annually for public budgets, and which they can spend freely without any restrictions since they assume that they can either increase production anytime they wish and/or count on price hikes to boost budgets and spending. It is appropriate, therefore, after the experience of half a century, and on the occasion of the release of the Arab Human Development Report for 2009, to ask the following questions about the challenges facing the Arab oil industry: First: What is the role of the industry when it comes to addressing environmental challenges as well as global warming? What are the policies that will be thus adopted by the industry to participate in alleviating air pollution, which is already threatening many Arab cities, not to mention the problem of global warming? Second: What is the role of national oil companies in the establishment of scientific institutes and the promotion of advanced research? The time has indeed come for the largest industry in the Arab world to start directly contributing in the establishment of scientific institutes that will conduct research into its areas of competence, and to train students with a set of skills that the industry will need in the future. Thirdly: Why are there no joint Arab oil services projects being established, which would ultimately form an initial notional framework and a concrete beginning for joint Arab action? Of course, something of the sort requires a political will (which is currently missing), as well as a supportive intellectual movement (which is not only missing but also strongly receding). Nevertheless, there are no reasons why we should stop thinking about such plans in order to start moving in the right direction, since the idea of a unified Arab currency is still inconceivable with the absence of real economic ties to support it. While it goes without saying that OPEC founded in the 1970s a number of jointly owned oil companies, the importance of these companies and their role are very limited, and have barely met the corporate targets that the companies were established to meet. Fourthly: How can a responsible public debate be conducted about one of the most important challenges facing the national oil companies, and their relationship with international oil companies - noting that these relations differ from one country to another - in light of the availability of competent nationals, the experience of national oil companies, and the size of available oil reserves? Also, what shape should the desired relationship between the local private companies and the oil sector take, and how can private companies play a bigger role in the oil sector? Fifthly: What is the function that oil revenues should have in budgets and in the economy? What percentage from these revenues should be allocated to the public budget, especially salaries and remunerations, and what percentage should be allocated to development projects or for infrastructure, and then what percentage should be retained? The most important question, which is being raised by the majority of the citizens, is how to control public spending, and ensure its transparency? Sixthly: What is the role of the Arab oil industry on the international level? What are the responsibilities that must be borne by this industry to ensure the stability of global markets? Is there any interest for the Arab citizen to have this large and rapid change in prices which often hit record levels over very short periods of time? What is the impact of this mirage of “oil revenues”, acquired through a rapid and unnatural rise of prices, on the Arab human psychology and behaviour, not to mention on the governments that are drafting their budgets based on this mirage? What is the role of Arab oil in ensuring the stability of global markets, especially if we take into account that many Arab countries have enough oil reserves to meet the global demand for many decades? *. Mr. Khadduri is an energy expert
