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26 June 2001  

Oil-for-Food Background Information


Weekly update

(16 - 22 June 2001)

For the third consecutive week there were no Iraqi oil exports under the United Nations oil-for-food programme.

In the course of the week, the United Nations oil overseers approved one new oil purchase contract for one million barrels of Kirkuk crude, bringing the total number of approved oil contracts in extended phase IX to 175. The approved contracts amount to 572 million barrels of oil, 351 million barrels of which are for Basrah Light and 221 million for Kirkuk.

So far in phase IX, which now ends on 3 July, Iraq has exported 293 million barrels of oil for an estimated €6.66 billion (euros) or $5.7 billion in revenue, at current prices and the rate of exchange. The average price of Iraqi crude oil during the week was approximately €26.04 or $22.26 per barrel. Iraqi oil exports since the beginning of the programme on 10 December 1996, total about 2.5 billion barrels, having generated an estimated revenue of some $38.6 billion and €6.66 billion (or $5.7 billion at the current rate of exchange). The United States 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.

Despite the 661 Committee’s further release from hold of four additional humanitarian supply contracts on the condition of close end-use monitoring by the United Nations observers in Iraq, which contain “1051 list” items, the total value of contracts placed on hold by the Committee rose slightly last week. It now stands at $3.2 billion, still representing 14.7 per cent of the value of all contracts circulated to the Committee. The released contracts were for sewage pipes, foot-and-mouth disease vaccine and intelligent pigging.

Altogether during the week, the Committee released from hold 24 contracts worth $45.5 million, while placing holds on 37 new contracts valued at $98.6 million. A single contract for the purchase of 2,500 computers for the Iraqi Ministry of Higher Education and Scientific Research was among the new contracts put on hold by the Committee. The computers are on the “1051 list”. Requests for additional technical information remained the most frequently cited reason by the Committee for putting a contract on hold. Currently, there are 1,302 contracts on hold, 868 of which worth $2.78 billion are for humanitarian supplies and 434 worth $421 million for oil industry spare parts and equipment.

Since the start of the programme, the 661 Committee has approved over $17 billion worth of humanitarian supply contracts, while the Office of the Iraq Programme (OIP) has processed another 2,198 contracts valued at $4.9 billion under “fast-track” procedures, based on pre-approved lists of supplies. Moreover, the Committee has approved 2,637 contracts worth $1.45 billion for the purchase of oil industry spare parts and equipment, with OIP having “fast-tracked” another 318 contracts worth $265 million in this category of goods. “Fast-tracking” began in March 2000.

As at 22 June 2001, approximately $2 billion and €1.7 billion in uncommitted funds were available in the United Nations escrow account for the issuance of additional letters of credit for the purchase of humanitarian supplies and oil spare parts and equipment by the Government of Iraq. Also, supplies valued at $11.1 billion, including over $1 billion worth of oil spare parts and equipment, were in production and delivery pipeline.

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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