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6 November 2001  

Oil-for-Food Background Information


Weekly Update

(27 October - 2 November 2001)

The estimated Iraqi oil export revenue for the present phase X of the United Nations oil-for-food programme is now expected to reach only about $5.38 billion, at current prices and rate of exchange. 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. The entire forecasted budget for the purchase of humanitarian supplies and equipment in phase X was set by the Government of Iraq at $5.5 billion. Phase X runs from 4 July to 30 November 2001.

Iraqi oil exports slipped further in the week ending 2 November to 14.6 million barrels, down from the previous week’s total of 14.9 million barrels. There were nine loadings in all - five from Mina al-Bakr terminal, with 9.9 million barrels of oil, and four from Ceyhan terminal, with 4.7 million barrels.

The average price of Iraqi crude oil was approximately €18.58 (euros) or $16.82 per barrel. The week’s exports generated an estimated €237 million or $215 million in revenue, at current prices and rate of exchange. Thus far in phase X, Iraq has exported 240.6 million barrels of oil, for an estimated revenue of €4.96 billion or $4.49 billion, while a total of 139 oil purchase contracts, covering 387 million barrels of oil, have been approved by the United Nations oil overseers, including two new contracts during the week in review. Of the total volume of approved oil sales, 231 million are for Basrah Light and 156 million for Kirkuk crude.

Some $38.6 billion and €11.6 billion ($10.1 billion) in estimated revenue has been raised from the export of more than 2.7 billion barrels of oil since the beginning of the programme on 10 December 1996.

Also since the start of the programme, almost $29.6 billion worth of humanitarian supply contracts have been both approved by the Security Council’s 661 sanctions committee and “fast-tracked” by the Office of the Iraq Programme (OIP), including $2.5 billion worth of contracts for oil industry spare parts and equipment. Out of this amount, about $15.7 billion worth of humanitarian supplies and $960 million worth of oil industry spare parts and equipment have been delivered to Iraq, while another $11.4 billion worth of humanitarian supplies and $1.5 billion worth of oil spare parts and equipment are in the production and delivery pipeline.

At the end of the week, 1,396 contracts for various supplies and equipment, worth almost $4.1 billion, were on hold by the 661 Committee, including 155 contracts, valued at $290 million, which were in the “inactive holds” category. Contracts that are placed on hold by the Committee requiring additional technical information for further evaluation, are categorized as “inactive holds” where the requested information is not provided by the suppliers in excess of 60 days. Once this information is received, the relevant contract is put back in the “active holds” category for decision by the holding Committee member(s). In the category of “active holds” there were 214 contracts, worth $464 million, for which although the suppliers had provided the requested information, the holding Committee member(s) had not made a final decision in excess of 60 days.

During the week, the Committee released from hold nine contracts, worth $20.3 million, while placing on hold 34 new contracts, worth $102.4 million. Altogether, 928 humanitarian supply contracts, worth $3.25 billion, and 468 oil industry equipment contracts, worth $529 million, were in the “active holds” category.

As at 1 November, over $1.3 billion and €593 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