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17 July 2001  

Oil-for-Food Background Information


Weekly update

(7 - 13 July 2001)

Iraq resumed its oil exports on 10 July, under the United Nations oil-for-food programme.  In the following three days, a total of 6.8 million barrels of oil were lifted through three loadings.  There were two loadings at Mina al-Bakr terminal, with 4.7 million barrels of oil and one at Ceyhan, with 2.1 million barrels.  These were the first exports in current phase X, accruing an estimated revenue of €151 million (euros) or $129 million at current prices and rate of exchange.  Phase X began on 4 July and runs through 30 November 2001.  The average price of Iraqi crude oil during the week was approximately €25.42 or $21.71 per barrel.

Since the beginning of the programme on 10 December 1996, Iraq has exported just over 2.5 billion barrels of oil for an estimated revenue of $38.6 billion and €6.8 billion (or $5.8 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.

Nine new oil purchase contracts were approved in the course of the week by the United Nations oil overseers for 32 million barrels of Basrah Light and 19 million barrels of Kirkuk crude.  Currently, there are 45 approved oil contracts, amounting to almost 160 million barrels of oil, 103 million of which are for Basrah Light and 57 million for Kirkuk.

The value of contracts placed on hold by the Security Council’s 661 sanctions committee remained almost constant at $3.4 billion.  During the week the Committee released from hold 25 contracts worth $104.1 million, while placing on hold 58 new contracts valued at $105.3 million.  Among the new “releases” were several high-value contracts in the telecommunications and food-handling sectors, including one telecommunications contract worth $28.2 million for a small mobile network and two contracts for flour mills valued at $50.1 million.  In all, 1,404 contracts are currently on hold, 956 of which worth $2.97 billion are for humanitarian supplies and 448 contracts worth $438 million for oil industry spare parts and equipment.

Since the start of the programme, the 661 Committee has approved 11,767 contracts worth $18.5 billion for humanitarian supplies for Iraq, while the Office of the Iraq Programme (OIP) has processed another 2,398 contracts under “fast-track” procedures worth $5.8 billion, based on pre-approved lists of supplies.  In addition, the Committee has approved 2,673 contracts worth $1.48 billion for the purchase of oil industry spare parts and equipment, with OIP having “fast-tracked” another 393 contracts worth $375 million in this category of goods.  “Fast-tracking” began in March 2000.

As at 13 July 2001, $13.5 billion worth of humanitarian supplies and $784 million worth of oil industry spare parts and equipment had been delivered to Iraq since the start of the programme.  Another $10.2 billion worth of supplies, including $1 billion worth of oil spare parts and equipment, were in the production and delivery pipeline.  Also, $1.9 billion and €1.5 billion in unused 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. 

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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