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30 May 2001  

Oil-for-Food Background Information


Weekly update

(19 - 25 May 2001)

On 24 May 2001, the Security Council’s 661 sanctions committee approved a list of about 100 items in the electricity sector for “fast-track” processing.  Similar lists now exist for seven other sectors of the oil-for-food programme, namely for food, health, education, agriculture, water and sanitation, housing, oil industry spare parts and equipment.  Since the adoption of the first of these lists in March 2000, the Office of the Iraq Programme (OIP) has processed 2,314 contracts worth over $4.76 billion, based on these pre-approved lists of supplies, including 253 contracts valued at $210 million for oil industry spare parts and equipment.

In terms of Iraqi oil exports, the weekly figure for the period 19 to 25 May showed a slight increase, totaling 15.6 million barrels, at the rate of just over 2.2 million barrels per day.  The week’s exports generated an estimated €433 million (euros) in revenue, at current prices.  There were five loadings each at Mina al-Bakr and Ceyhan terminals, with the lifting of 10.1 million barrels at Mina al-Bakr and 5.5 million barrels at Ceyhan.  The average price of Iraqi crude oil during the week was approximately $24.02 or €27.79 per barrel.

So far in current phase IX of the programme, which ends on 3 June, oil exports total 268.4 million barrels, having raised an estimated €6 billion in revenue, at current prices.  Iraq’s oil exports since the start of the programme on 10 December 1996 stand at about 2.47 billion barrels, for an estimated revenue of some $38.6 billion and €6 billion.

The United Nations oil overseers during the week approved four new oil purchase contracts for four million barrels each of Basrah Light and Kirkuk crude.  There are now 172 approved contracts for the lifting of more than 565 million barrels of oil, of which 347 million barrels are for Basrah Light and 218 million for Kirkuk.

There was a modest drop in the value of contracts placed on hold by the 661 Committee, bringing the total to $3.67 billion, covering 1,696 contracts.  This represents 17.4 per cent of the value of all contracts circulated to the Committee.  The “holds” comprised 1,143 contracts worth $3.22 billion for humanitarian supplies and 553 contracts worth $451 million for oil industry spare parts and equipment.  In the course of the week, the Committee lifted the hold on 10 contracts worth $36.9 million, and placed on hold 23 new contracts, valued at $27.3 million.  The “released” contracts included locomotives, dental supplies, fans and compressors.  The new “holds” covered cranes, trucks, medical supplies, hydraulic pumps and generators.

The Committee members cite various reasons for placing a contract on hold.  Of the total value of the contracts on hold currently, 52.2 per cent require additional technical or end-use/end-user information; 33.4 per cent contain “1051 list” items; 8.3 per cent are thought to be of “dual use”; 4.7 per cent await further evaluation by the Committee; 1.15 per cent cover oil industry spare parts and equipment and are placed on hold as not directly relating to the repair of Iraqi oil infrastructure for the increase of oil exports.   The remaining 0.25 per cent fall under the category of “other reasons”, which could range from payment mechanism clauses that are not permitted, questionable prices to illegible documentation.

In phases IV to IX that are currently active, the 661 Committee has approved 8,259 contracts worth $13.7 billion, including 2,465 contracts worth more than $1.37 billion for the purchase of oil industry spare parts and equipment.  This brings the total value of approved contracts in all categories and combined with “fast-track” processing to $18.46 billion.

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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