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22 January 2002  

Oil-for-Food Background Information


Weekly Update

(12 - 18 January 2002) 

The Executive Director of the Iraq Programme, Benon V. Sevan, continues his working visit to Iraq, which began on 14 January 2002.  Following an initial round of discussions with a number of Iraqi government officials in Baghdad on the implementation of the oil-for-food programme, including the Ministers of Foreign Affairs, Oil, Health, Trade, Interior and the Commissioner of Electricity, Mr. Sevan is visiting the three northern governorates of Sulaymaniyah, Erbil and Dahuk this week.  

 In terms of Iraq’s oil exports under the programme in the week ending 18 January 2002, despite the total lifting of 10.8 million barrels, the exports remained below average, at just over 1.5 million barrels per day.  There were seven loadings from the two authorized terminals of Mina al-Bakr and Ceyhan, with five loadings from the former, totalling 7.7 million barrels of oil, and two from the latter, with 3.1 million barrels.  At the average price of approximately €18.65 (euros) or $16.50 per barrel, the week’s exports netted an estimated €200 million or $180 million in revenue, at current prices and rate of exchange.  This brought the total estimated revenue in current phase XI of the programme to just over €1 billion or $922 million.  Phase XI runs from 1 December 2001 to 29 May 2002. 

 There are now 97 approved oil purchase contracts in phase XI, including 15 new contracts approved by the United Nations oil overseers during the week in review.  The approved contracts are for 240 million barrels of oil, of which 143 million barrels are for Basrah Light and 97 million barrels for Kirkuk crude.  Oil lifted to date against approved contracts in phase XI amounts to 64.5 million barrels. 

 An estimated $38.6 billion and €13.7 billion ($11.9 billion) in revenue has been generated from the export of over 2.86 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.

 During the same period, some $31.2 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), including $2.8 billion worth of contracts for oil industry spare parts and equipment.  To date, $18.7 billion worth of humanitarian supplies and equipment have been delivered to Iraq, including $1.1 billion worth of oil industry equipment, while another $10.8 billion worth of humanitarian supplies and $1.7 billion worth of oil industry equipment are in the production and delivery pipeline.

The total value of contracts placed on hold by the 661 Committee has surpassed the $5 billion mark, standing at $5.038 billion.  During the week, the Committee released from hold only four contracts, worth $2.66 million, while placing on hold 47 new contracts, worth $90.3 million.  Altogether, there were 1,938 contracts on hold for the purchase of various humanitarian supplies and equipment, of which 1,333 contracts, worth $4.37 billion, were for humanitarian supplies and 605 contracts, worth $668 million, were for oil industry spare parts and equipment. 

 In the “inactive holds” category, there were 219 contracts, worth  $345.5 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 474 contracts, worth over $1.57 billion, for which although the suppliers had provided the requested information more than 60 days ago, the “holding” Committee member(s) had not yet made a final decision. 

As at 16 January 2002, about $1.7 billion and €428 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