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20 March 2001  

Oil-for-Food Background Information


Update for the period
10 - 16 March 2001

There was a large jump in Iraqi oil exports in the week leading to 16 March.  At an average of almost 2.6 million barrels a day, Iraq exported a total of 17.9 million barrels of oil during the week, raising an estimated €367 million (euros) in revenue at current prices.  This is the largest volume of oil exported in a single week under the current phase IX, which began on 6 December 2000.  There were 11 loadings at Ceyhan and Mina al-Bakr terminals, six of which were at Ceyhan.  The average price of Iraqi crude oil during the week was approximately $19.94 or €21.91 (euros) per barrel.

In phase IX Iraqi oil exports, so far, have totaled 118.7 million barrels, earning an estimated €2.54 billion (euros).  Since the beginning of the oil-for-food programme on 10 December 1996, Iraq has exported 2,325 million barrels of oil for an estimated revenue of some $38.6 billion and €2.54 billion (euros).

During the week, the United Nations oil overseers approved eight more oil purchase contracts, on behalf of the Security Council’s 661 sanctions Committee.  These contracts were for 8.3 million barrels of Kirkuk crude and 12 million barrels of Basrah Light.  There are now 129 approved contracts for the lifting of over 368 million barrels of oil, 220 million barrels of which are for Basrah Light and 148 million barrels for Kirkuk. 

The United Nations oil overseers have now adopted a new policy to prevent the diversion and discharge of Iraqi oil cargo at a destination other than that authorized in an approved oil purchase contract.  According to the new policy, the masters of the vessels loading Iraqi oil will sign a notification indicating the authorized destination of the cargo.  Any diversion from the authorized destination will be the liability of the shipping company.  The new policy is in response to an incident in February when an oil cargo of two million barrels of Basrah Light destined for the United States was discharged in the Far East, incurring a revenue loss of 8.5 million euros to the programme.  The United Nations Treasury is in the process of collecting this amount from the buyer through BNP Paribas, at the request of the Iraqi State Oil Marketing Organization (SOMO).

There was yet another slight increase in the total value of contracts placed on hold by the 661 Committee.  There were 1,677 contracts worth over $3.36 billion on hold, representing 17 per cent of the value of all contracts circulated to the Committee.  Of these, 1,124 contracts worth about $2.92 billion were for humanitarian supplies, while 553 contracts worth $442 million were for oil industry spare parts and equipment.

During the week, 35 contracts worth $92.2 million were released from hold by the Committee and 58 new contracts worth $99.9 million were put on hold by the Committee for various reasons.  The only two contracts for human vaccines worth $1.2 million previously on hold, were released by the Committee during the week. 

In phases IV to IX, the Committee has now approved 5,407 contracts worth over $11.4 billion for humanitarian supplies and another 2,398 contracts worth more than $1.3 billion for the purchase of oil industry spare parts and equipment.  The Office of the Iraq Programme (OIP) has notified the Committee of 1,524 contracts worth over $3.6 billion for humanitarian supplies which have been processed under “fast track” procedures based on pre-approved lists, while another 117 contracts worth about $78 million have also been “fast tracked” for oil industry spare parts and equipment.

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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