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16 January 2001  
Oil-for-Food Background Information


Update for the period
6  - 12 January 2001

During the week of 6 to 12 January, Iraqi oil exports under the United Nations oil-for-food programme continued to register below average figures.  Through three oil loadings at Mina al-Bakr terminal, Iraq exported 4.7 million barrels of oil, raising an estimated €98 million (euros) in revenue.  There have been no oil loadings at Ceyhan terminal this month, while there was only a single loading in the month of December.

According to the United Nations oil overseers, there was an estimated loss of $1 billion in revenue, as a result of disrupted and reduced Iraqi oil exports under the programme during the month of December only, with an additional estimated revenue loss of $380 million in the first 10 days of January.  Iraq exported approximately 18 million barrels of crude oil in December -  some 50 million barrels less than expected, while during the first 10 days of January, the exports were 22 million barrels below those anticipated.

In current phase IX, running from 6 December through 3 June 2001, Iraq so far has exported 22.4 million barrels of oil for an estimated €464 million (euros).   The US dollar was replaced with the euro for the Iraqi oil purchases in early November 2000, at the request of the Government of Iraq and with the authorization of the Security Council’s 661 sanctions committee for Iraq.

In the week leading to 12 January, the oil overseers and the 661 Committee approved three new contracts for the purchase of Iraqi oil, consisting of six million barrels of Basrah Light crude destined for the United States, Far Eastern and European markets and four million barrels of Kirkuk crude for the European and United States markets.

There are now 68 approved oil purchase contracts for 128.6 million barrels of oil awaiting completion, comprising almost 75 million barrels of Basrah Light and 53.6 million barrels of Kirkuk.

Since the start of the programme on 10 December 1996 Iraq has exported almost 2,229 million barrels of oil for an estimated total revenue of over $38.6 billion and €464 million (euros).

With the adoption of Security Council resolution 1330 (2000) on 5 December 2000, in current phase IX, around 72 per cent of the oil revenue funds the humanitarian programme in Iraq, 25 per cent goes to the Compensation Commission, while 2.2 per cent covers the United Nations costs for administering the programme and 0.8 per cent for the administration of the UN Monitoring and Inspection Commission (UNMOVIC).  Previously, 66 per cent was being allocated to the humanitarian programme, with the Compensation Commission receiving 30 per cent of the funds.

The Government of Iraq has not yet submitted its distribution plan for phase IX.  A distribution plan, once approved by the Secretary-General, becomes the basis for the Government of Iraq to purchase humanitarian supplies and oil industry spare parts and equipment during a given phase.

The Office of the Iraq Programme (OIP) has now submitted for the approval of the 661 Committee the expanded lists of supplies in the education, water and sanitation, food-handling, agricultural and health sectors, as required by resolution 1330 (2000).  Following the approval of the Committee, the expanded lists will serve as the basis for “fast track” contract processing by OIP.  The already existing lists, which came into effect in March 2000, have proven to expedite the delivery of humanitarian supplies to Iraq.  The Committee’s action on all the expanded lists is expected by the end of this month.

In phases IV to VIII, the Committee has now approved over $10 billion worth of contracts for humanitarian supplies, while an additional $3 billion worth have been “fast tracked” by OIP.  The Committee has also approved 2,345 contracts worth $1.27 billion for the purchase of oil industry spare parts and equipment, with another 80 contracts, worth about $55 million have been approved under "fast track" procedures by OIP.

As at 12 January, the total value of contracts placed on hold by the 661 committee stood at over $3.1 billion ($2.7 billion for humanitarian supplies and $407 million for oil industry spare parts and equipment).  This represents 17.5 per cent of all circulated contracts – a large increase in comparison with the figures one month ago for “holds”, which comprised 14.9 per cent of all circulated contracts to the Committee.

During the week covered, the Committee released 14 contracts previously on hold worth $152.8 million and placed 61 new contracts on hold worth $362.6 million.     

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Produced for media and public information – not an official United Nations Document
For further information please contact Hasmik Egian, OIP - NY, 1.212.963.4341