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11 December 2001  

Oil-for-Food Background Information


Weekly Update

(1 – 7 December 2001)

During the week ending 7 December 2001, some six million barrels of oil were exported, earning an estimated €110 million (euros) or $98 million in revenue, based on current prices and rate of exchange.  Of the three loadings, two took place at Mina al-Bakr terminal, with 4.1 million barrels of oil, and one at Ceyhan terminal, with 1.9 million barrels.  Although these loadings were already scheduled during phase X of the oil-for-food programme, they were completed in current phase XI, which runs from 1 December 2001 to 29 May 2002.  

At the request of the Iraqi State Oil Marketing Organization (SOMO) and contract holders for the purchase of Iraqi crude oil, 27 outstanding approved contracts from phase X of the programme, which ended on 30 November 2001, were extended into phase XI.

According to the United Nations oil overseers, Iraqi oil exports in phase X of the programme reached just over 300 million barrels, of which 27.5 per cent were destined to the European market, 69.4 per cent to the United States market and 3.1 per cent to the Far East.

Since the beginning of the programme on 10 December 1996, Iraq has generated an estimated $38.6 billion and €12.8 billion ($11.1 billion) in revenue from the export of 2.8 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.

Some $30.6 billion worth of contracts for humanitarian supplies and equipment have been both approved by the Security Council’s 661 sanctions committee and “fast-tracked” by the Office of the Iraq Programme (OIP) since the start of the programme, including $2.7 billion worth of contracts for oil industry spare parts and equipment.  Out of this total, about $16.6 billion worth of humanitarian supplies and over $1 billion worth of oil industry equipment have been delivered to Iraq, while another $11.35 billion worth of humanitarian supplies and $1.65 billion worth of oil industry equipment are in the production and delivery pipeline.

The upward trend in the total value of contracts placed on hold by the 661 Committee continued throughout the week, reaching $4.51 billion, covering 1,587 contracts for the purchase of various humanitarian supplies and equipment.  There were 142 contracts, worth  $246.2 million, in the “inactive holds” category, for which the suppliers had not provided the requested additional technical information in excess of 60 days.  In the category of “active holds” there were 340 contracts, worth $1.1 billion, 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 six contracts, worth $5.9 million, while placing on hold 53 new contracts, worth $139.9 million.  The new “holds” included one high-value contract in the agriculture sector for water tankers, worth over $27 million, and five contracts, worth $35.4 million, for railway cargo cars and locomotive spare parts.  In all, 1,048 humanitarian supply contracts, worth $3.73 billion, and 539 oil industry equipment contracts, worth $531 million, were in the “active holds” category.

As at 7 December, about $1.8 billion and €492 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