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31 July 2001  

Oil-for-Food Background Information


Weekly update

(21 - 27 July 2001)

On 24 July, the Executive Director of the Iraq Programme, Benon V. Sevan, in identical letters addressed to the Permanent Representative of Iraq to the United Nations and to the Chairman of the Security Council’s 661 sanctions committee, informed that an amount of $75 million in excess funds had been transferred from the account designated for UN administrative costs under the oil-for-food programme to the account for the purchase of humanitarian supplies. The savings were the result of UN administrative cost minimization efforts, as directed by the Secretary-General. This was the second such transfer of funds. Earlier this year, another $52 million in UN-cost savings were transferred for the purchase of humanitarian supplies by Iraq.

On 23 July, the Government of Iraq submitted its distribution plan for phase X. The plan foresees a budget of $5.5 billion for the humanitarian programme, to be derived from Iraqi oil exports. 72 per cent of the oil revenue goes to fund the purchase of humanitarian supplies and equipment. The plan is currently under review by the Secretary-General. Once approved, it will form the basis on which the Government of Iraq will contract supplies and equipment in the 15 central and southern governorates, while the United Nations will do the same in the three northern governorates, on behalf of the Government of Iraq. Food and medicines are purchased in bulk by the Government of Iraq for the entire country.

In the week ending on 27 July, Iraqi oil exports totaled 12 million barrels, at the average rate of 1.7 million barrels per day. The estimated revenue earned from the exports was €287 million (euros) or $252 million at current prices and rate of exchange. Of the total six loadings at the authorized terminals of Mina al-Bakr and Ceyhan, four were from Mina, with 7.6 million barrels of oil and two from Ceyhan, with 4.4 million barrels. The average price of Iraqi crude oil during the week was approximately €24.82 or $21.70 per barrel.

The United Nations oil overseers approved six more oil purchase contracts for 24 million barrels of Basrah Light and 13 million barrels of Kirkuk crude. In current phase X of the programme, which runs from 4 July to 30 November 2001, there are 65 approved oil contracts, amounting to 227 million barrels of oil, 147 million of which are for Basrah Light and 80 million for Kirkuk. So far, Iraq has exported 34.7 million barrels of oil for an estimated €811 million or $711 million in revenue, at current prices and rate of exchange.

Iraq has generated an estimated revenue of some $38.6 billion and €7.5 billion (or $6.3 billion at current prices and rate of exchange) from the export of over 2.5 billion barrels of oil since the start of the programme on 10 December 1996.

Of the total of $25.2 billion worth of approved and “fast-tracked” humanitarian supply contracts and $1.94 billion worth of approved and “fast-tracked” oil industry spare parts and equipment contracts, $13.6 billion worth of humanitarian supplies and $797 million worth of oil industry spare parts and equipment had been delivered to Iraq since the start of the programme. In addition, over $12 billion worth of supplies, including $1.1 billion worth of oil spare parts and equipment, were in the production and delivery pipeline.

At the end of the week, the value of contracts placed on hold by the 661 Committee stood at $3.5 billion. 15 contracts worth $15 million were released from hold by the Committee, while 33 new contracts worth $66 million were placed on hold. Altogether, 1,450 contracts were on hold, 996 of which worth $3.1 billion were for humanitarian supplies and 454 contracts worth $441 million for oil industry spare parts and equipment. The “released” contracts included 200 ambulances, medical appliances, vehicles, a sprinkler irrigation system, chemicals, valves, pipes, among others. The new “holds” were for excavators, radio equipment, buses, trucks, water tankers, pesticides, mobile cranes, steam boilers, mobile cranes, etc.

As at 27 July, $1.9 billion and €1.3 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