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25 September 2001  

Oil-for-Food Background Information


Weekly update

(15 - 21 September 2001)

The stalemate in the Security Council over the issue of the frequency for reviewing prices for Iraqi crude oil deliveries, which are submitted by the Iraqi State Marketing Organization (SOMO), has continued. This has prevented the approval of prices for Iraqi crude oil to the United States market in September. Nevertheless, the flow of Iraqi weekly oil exports, ending on 21 September, under the United Nations oil-for-food programme, was strong. At an average rate of over 2.3 million barrels per day, a total of 16.4 million barrels of oil were lifted from the two authorized loading terminals of Mina al-Bakr and Ceyhan, with 9.8 million barrels from the former and 6.6 million barrels from the latter.

The average price of Iraqi crude oil during the week was approximately €25 or $23.10 per barrel. The week’s exports added another €410 million (euros) or $379 million in estimated revenue, at current prices and rate of exchange, bringing the total estimated revenue in current phase X to €3.5 billion or $3.2 billion. Since the start of phase X on 4 July, some 153.5 million barrels of oil have been lifted. Phase X ends on 30 November 2001. The United Nations oil overseers have, so far, approved 127 oil purchase contracts for this phase, including 13 new contracts during the week in review. The quantity of oil covered by these contracts amounts to 349 million barrels, 213 million of which are for Basrah Light and 136 million for Kirkuk crude.

Since the beginning of the Programme on 10 December 1996, some $38.6 billion and €10.1 billion ($8.9 billion) in estimated revenue has been generated from the sale of over 2.65 billion barrels of oil. With the adoption of Security Council resolution 1330 (2000) on 5 December 2000, 72 per cent of the oil proceeds fund 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.

So far, $25.9 billion worth of contracts for humanitarian supplies and another $2.2 billion worth of contracts for oil industry spare parts and equipment have been approved by the Security Council’s 661 Sanctions Committee and “fast-tracked” by the Office of the Iraq Programme (OIP). Humanitarian supplies worth about $14.8 billion and $905 million worth of oil industry spare parts and equipment have been delivered to Iraq. In addition, $11.1 billion worth of humanitarian supplies and $1.3 billion worth of oil spare parts and equipment are in the production and delivery pipeline.

In a reversal of recent weeks’ trend, the number and value of contracts released from hold by the 661 Committee outweighed those placed newly on hold. In all, 54 contracts, worth $179.5 million, were released from hold, including 11 contracts, worth $111.4 million for various types of vehicles, trucks and buses, while 34 new contracts, worth $114.2 million, were placed on hold by the Committee. Altogether, 1,508 contracts worth almost $4 billion were on hold, comprising 1,037 contracts for humanitarian supplies worth almost $3.5 billion and 471 contracts for industry spare parts and equipment worth $527 million.

As at 21 September, about $1.2 billion and €795 million 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