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15 January 2002  

Oil-for-Food Background Information


Weekly Update

(5 - 11 January 2002)

Iraqi oil exports under the United Nations oil-for-food programme plunged drastically to mere three million barrels in the week ending 11 January, down from the previous week’s high of 15.5 million barrels, with only one loading each from the loading terminals of Mina al-Bakr and Ceyhan. This was, so far, the lowest level of weekly exports in current phase XI of the programme, which began on 1 December 2001 and ends on 29 May 2002. An estimated €60 million (euros) or $55 million was added to the total estimated revenue in phase XI, at current prices and rate of exchange, which now stands at €899 million or $801 million. The average price of Iraqi crude oil during the week was approximately €20.80 (euros) or $18.55 per barrel.

The United Nations oil overseers approved 12 new oil purchase contracts for 32.5 million barrels of Iraqi oil. There are now 82 approved such contracts in phase XI, covering 214 million barrels of oil, of which 126 million barrels are for Basrah Light and 88 million barrels for Kirkuk crude. A total of 53.7 million barrels of oil has thus far been lifted against the approved contracts.

Since the beginning of the programme on 10 December 1996, an estimated $38.6 billion and €13.6 billion ($11.8 billion) in revenue has been generated from the export of over 2.85 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. Also from the total revenue, 25 percent is allocated to the Compensation Fund, while 2.2 per cent goes towards covering the United Nations costs for administering the programme and approximately 0.8 per cent for the administration of the United Nations Monitoring, Verification and Inspection Commission (UNMOVIC).

Despite the release from hold of one high-value contract in the electricity sector, worth $147.5 million, by the Security Council’s 661 sanctions committee, the total value of “holds” placed by the Committee remained almost unchanged at $4.951 billion. The “holds” covered 1,892 contracts for the purchase of various humanitarian supplies and equipment, of which 1,297 contracts, worth $4.3 billion, were for humanitarian supplies and 595 contracts, worth $655 million, were for oil industry spare parts and equipment. During the week, the Committee released from hold 19 contracts, worth $191.6 million, while placing on hold 51 new contracts, worth $184.7 million.

In the “active holds” category, there were 222 contracts, worth $371 million, for which the suppliers had not provided the additional technical information in excess of 60 days, as requested by the “holding” Committee member(s). In the category of “active holds” there were 440 contracts, worth over $1.3 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.

Since the start of the programme, some $31.1 billion worth of contracts for humanitarian supplies and equipment have been both approved by the 661 Committee and “fast-tracked” by the Office of the Iraq Programme (OIP), including $2.8 billion worth of contracts for oil industry spare parts and equipment. Humanitarian supplies and equipment worth $18.5 billion have been delivered to Iraq, including $1.1 billion worth of oil industry equipment, while another $10.9 billion worth of humanitarian supplies and $1.7 billion worth of oil industry equipment are in the production and delivery pipeline.

As at 11 January 2002, about $1.7 billion and €396 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