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3 July 2001  

Oil-for-Food Background Information


Weekly update

(23 - 29 June 2001)

As at 29 June 2001, approximately $2 billion and €1.77 billion (euros) in uncommitted funds were available in the United Nations escrow account for Iraq for the purchase of humanitarian supplies, oil spare parts and equipment for the 15 central and southern governorates of Iraq, by the Government of Iraq, including food and medicines for the three northern governorates, under the bulk purchase arrangements. Also, $10.6 billion worth of supplies, including $1 billion worth of oil spare parts and equipment, under already approved contracts, were in production and delivery pipeline. As at 30 June 2001, over $13.3 billion worth of supplies and equipment had been delivered to Iraq since the start of the implementation of oil-for-food programme in December 1996.

With the adoption of Security Council resolution 1330 (2000) on 5 December 2000, 72 per cent of the oil revenue funds the humanitarian programme in Iraq, 59 per cent of which is for the 15 central and southern governorates and 13 per cent for the three northern governorates of Iraq. As at 27 June 2001, over $19.5 billion and €4.5 billion (euros) had been made available for the programme’s implementation in the 15 central and southern governorates of Iraq and $5.6 billion for the three northern governorates.

In a ground-breaking move, the Security Council’s 661 sanctions committee lifted from hold five telecommunications contracts worth over $18.6 million, including a single contract for nine digital exchange systems with 215,000 lines, valued at $15.5 million. Some of the released contracts contained “1051 list” computers. Also released from hold were two meteorological contracts, comprising an agro-meteorological weather observation system and a short-wave single-band radio station.

Nevertheless by the end of the week, the total value of contracts on hold was up by some $100 million, now standing at $3.3 billion, which represents 15.1 per cent of the value of all contracts circulated to the 661 committee. The “holds” covered 1,328 contracts, 889 of which worth $2.88 billion were for humanitarian supplies and 439 worth $432 million for oil industry spare parts and equipment. Altogether during the week, the Committee released from hold 26 contracts, valued at $62 million, while placing on hold 51 new contracts valued at $183.1 million. The new “holds” included several high-value contracts in the water and sanitation sector, containing “1051 list” items, as well printing equipment for the education sector.

Since the start of the programme, the 661 Committee has approved 8,303 contracts worth over $17.1 billion for humanitarian supplies, while the Office of the Iraq Programme (OIP) has processed another 2,248 contracts under “fast-track” procedures worth $5 billion, based on pre-approved lists of supplies, for the 15 central and southern governorates of Iraq, including food and medicines for the three northern governorates under the bulk purchase arrangements. In addition, the Committee has approved 2,643 contracts worth $1.46 billion for the purchase of oil industry spare parts and equipment, with OIP having “fast-tracked” another 345 contracts worth $329 million in this category of goods. “Fast-tracking” began in March 2000.

There have been no Iraqi oil exports under the oil-for-food programme since 4 June 2001.

In the course of the week, the United Nations oil overseers approved two new oil purchase contracts for one million barrels of Kirkuk crude and four million barrels of Basrah Light, raising the number of approved oil contracts in phase IX to 177. Phase IX ends today, at mid-night. The approved contracts amount to 578 million barrels of oil, 356 million of which are for Basrah Light and 222 million for Kirkuk.

Revenue accrued from the export of 293 million barrels of oil in phase IX is estimated at €6.67 billion or $5.6 billion, at current prices and the rate of exchange. The average price of Iraqi crude oil during the week was approximately €25.55 or $21.85 per barrel. Iraqi oil exports since the beginning of the programme total about 2.5 billion barrels, having generated an estimated $38.6 billion and €6.67 billion (or $5.6 billion) in revenue. 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.

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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