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10 July 2001  

Oil-for-Food Background Information


Weekly update

(30 June  - 6 July 2001)

During the week Iraq did not resume its oil exports under the United Nations oil-for-food programme, suspended since 4 June 2001.

On 9 July 2001, through an exchange of letters between the Secretariat of the United Nations and the Government of Iraq, the Memorandum of Understanding (MOU) of 20 May 1996 on the implementation of Security Council resolution 986 (1995) was extended for the duration of phase X.  Phase X of the programme came into effect on 4 July 2001 and runs through 30 November 2001, under Security Council resolution 1360 (2001).

In the course of the week, the oil overseers approved one new oil purchase contract for two million barrels of Kirkuk crude.  Currently, there are 178 approved oil contracts amounting to 580 million barrels of oil, 356 million of which are for Basrah Light and 224 million for Kirkuk.

Since the beginning of the programme on 10 December 1996, Iraq has exported about 2.5 billion barrels of oil for an estimated revenue of $38.6 billion and €6.67 billion (or $5.6 billion at current prices and 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 661 committee.  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.

During the week, the 661 committee released from hold five contracts worth $7.56 million, while placing on hold 50 new contracts valued at $93.3 million.  The total value of “holds” now stands at over $3.4 billion.  In all, 1,373 contracts were on hold, 924 of which worth almost $3 billion were for humanitarian supplies and 449 contracts worth $431 million for oil industry spare parts and equipment.

Since the start of the programme, the 661 Committee has approved 11,705 contracts worth $18.2 billion for humanitarian supplies for Iraq, while OIP has processed another 2,361 contracts under “fast-track” procedures worth $5.77 billion, based on pre-approved lists of supplies.  In addition, the Committee has approved 2,653 contracts worth $1.47 billion for the purchase of oil industry spare parts and equipment, with OIP having “fast-tracked” another 367 contracts worth $360 million in this category of goods.  “Fast-tracking” began in March 2000.

As at 6 July 2001, $13.4 billion worth of humanitarian supplies and $778 million worth of oil industry spare parts and equipment had been delivered to Iraq since the start of the programme.  Another $11 billion worth of supplies, including $1 billion worth of oil spare parts and equipment, were in the 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