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8 May 2001  

Oil-for-Food Background Information


Weekly update

(28 April - 4 May 2001)

The total value of contracts placed on hold by the Security Council’s 661 sanctions committee decreased last week, both in absolute and relative terms, after months of gradual increase.  Overall, 1,691 contracts worth $3.5 billion were on hold, representing 17.1 per cent of the value of all contracts circulated to the 661 Committee.  Of the total “holds”, 1,144 contracts worth $3.07 billion were for humanitarian supplies, while 547 contracts valued at $440 million were for oil industry spare parts and equipment.

In the week 28 April to 4 May 2001, the Committee released from hold 40 contracts worth $201.4 million and placed on hold 32 new contracts valued at $107.8 million.  A single contract for the electricity sector with a value of $110 million was among those recently released from hold, as well as a number of contracts for irrigation systems, animal vaccines, tug boats for Umm Qasr port, gas turbine equipment and a waste-water treatment plant.  New contracts put on hold by the Committee included water treatment and electro-mechanical equipment, pipes, valves, a television transmitter, medical machines and a tyre-testing machine.

In currently active phases IV to IX of the oil-for-food programme, the 661 Committee and the Office of the Iraq Programme (OIP) have approved 7,581 contracts worth $16.5 billion for the purchase of humanitarian supplies, including 1,880 contracts worth $4.45 billion processed by OIP under “fast-track” procedures based on pre-approved lists of supplies.  In addition, the Committee has approved 2,443 contracts worth over $1.33 billion for the purchase of oil industry spare parts and equipment, while OIP has “fast-tracked” another 210 contracts worth $154 million in this category.

At a briefing to the 661 Committee on 4 May, the International Telecommunications Union (ITU), which observes the distribution of supplies for the telecommunications sector in central and southern Iraq and implements projects in northern Iraq on behalf of the Government of Iraq under the programme, informed that the entire telecommunications infrastructure in Iraq had deteriorated seriously.  It noted a decrease in telephone density from 5.6 per cent in 1990 to about 3.3 per cent in 1998, as well as a drop in the inter-exchange transmission links from 20,000 to 7,000 during the same period.  As at 25 April 2001, 154 contracts worth $279 million for this sector had been circulated to the 661 Committee, of which 83 contracts valued at $71 million had been approved and 71 contracts worth $208 million had been placed on hold by the Committee.

In the week under review, Iraq exported 14.4 million barrels of oil, at the rate of 2.06 million barrels per day, raising an estimated €371 million (euros) in revenue at current prices.  Of the total nine loadings, five were at Mina al-Bakr terminal, with the lifting of 8.5 million barrels of oil, while four were at Ceyhan terminal, with the lifting of 5.9 million barrels.  The average price of Iraqi crude oil during the week was approximately $22.92 or €25.76 (euros) per barrel.

Iraqi oil exports in current phase IX, so far, total 224.7 million barrels, having generated an estimated €5 billion (euros) in revenue.  Since the start of the programme on 10 December 1996, Iraq has exported over 2.4 billion barrels of oil, for an estimated revenue of some $38.6 billion and €5 billion (euros).

During the week, the United Nations oil overseers approved two new oil purchase contracts for six million barrels of Basrah Light and two million barrels of Kirkuk crude.  Currently, there are 160 approved contracts for the lifting of over 495 million barrels of oil, of which 301 million are for Basrah Light and 194 million for Kirkuk.

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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