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27 November 2001  

Oil-for-Food Background Information


Weekly Update

(17 - 23 November 2001)

Iraqi oil exports plunged from the previous week’s high of 18.6 million barrels to 11.2 million barrels in the week ending 23 November 2001. Of the total nine loadings, five were from the terminal of Mina al-Bakr, with 6.7 million barrels of oil, and four from Ceyhan terminal, with 4.5 million barrels. The week’s exports earned another €192 million (euros) or $170 million in estimated revenue, based on current prices and rate of exchange, raising the estimated total revenue in the current phase X of the oil-for-food programme to €5.6 billion or $4.93 billion. The average price of Iraqi crude oil was approximately €17.20 or $15.15 per barrel.

There were no new contracts approved by the United Nations oil overseers during the week in review. There are 144 approved oil purchase contracts for 396 million barrels of oil in phase X of the programme, of which so far, Iraq has exported 281.3 million barrels. Phase X ends on 30 November.

Iraq has generated an estimated $38.6 billion and €12.3 billion ($10.6 billion) in revenue from the export of 2.78 billion barrels of oil since the beginning of the programme on 10 December 1996. 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.

Also since the start of the programme, over $30.2 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 $2.6 billion worth of contracts for oil industry spare parts and equipment. Of this total, more than $16.3 billion worth of humanitarian supplies and $1 billion worth of oil industry equipment have been delivered to Iraq, while another $11.3 billion worth of humanitarian supplies and $1.6 billion worth of oil industry equipment are in the production and delivery pipeline.

At a briefing on the state of the electricity sector in Iraq, the United Nations Development Programme (UNDP) informed the 661 Committee that the rehabilitation and installation of new gas units under the oil-for-food programme have added 400 megawatts to power generating capacity in Iraq. Nevertheless, there is a power deficit of 2,800 megawatts at peak hours, resulting in electricity cuts countrywide.

The level of contracts placed on hold by the Committee continued to rise, standing at $4.23 billion at the end of the week, to include some 1,480 contracts for the purchase of various supplies and equipment. Among the “holds” were 144 contracts, worth $305.5 million, in the “inactive holds” category. Contracts that are placed on hold by the Committee that require additional technical information from the suppliers to allow proper evaluation, are categorized as “inactive holds” where the requested information has not been provided by the suppliers in excess of 60 days. Once the 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” were 305 contracts, worth $995 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 12 contracts, worth $44.4 million, comprising contracts for the supply of, among others, garbage trucks, firefighting vehicles, water tankers and tractors. Concurrently, the Committee placed on hold 34 new contracts, worth $60.9 million, including contracts for bulldozers, waste-water treatment equipment, chemicals, gate valves and trailers. In all, 975 humanitarian supply contracts, worth $3.39 billion, and 505 oil industry equipment contracts, worth $520 million, were in the “active holds” category.

As at 23 November, about $1.7 billion and €635 million in unused funds were available in the United Nations Iraq 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