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29 January 2002  

Oil-for-Food Background Information


Weekly Update

(19 - 25 January 2002)

The volume of Iraq’s oil exports under the United Nations oil-for-food programme rose for the second consecutive week, averaging two million barrels per day in the week ending 25 January 2002. With nine loadings in all from the two authorized loadings terminals of Mina al-Bakr and Ceyhan, the week’s exports totaled 14 million barrels, generating an estimated €230 million (euros) or $200 million in revenue, at current prices and rate of exchange. There were five liftings from Mina al-Bakr, with 7.7 million barrels of oil, and four from Ceyhan, with 6.3 million barrels. The average price of Iraqi crude oil was approximately €18.60 or $16.40 per barrel.

During the week, the United Nations oil overseers approved nine new oil purchase contracts, bringing the total number of approved such contracts in current phase XI of the programme to 106, covering 263 million barrels of oil. So far in phase XI, which runs from 1 December 2001 to 29 May 2002, only 78.5 million barrels have been lifted out of the approved amount, netting about €1.36 billion or $1.18 billion in estimated revenue.

Since the start of the programme on 10 December 1996, Iraq has exported some 2.88 billion barrels of oil, raising about $38.6 billion and €14 billion ($12.2 billion) in revenue. The United States dollar was replaced with the euro for Iraqi oil purchases in early November 2000, at the request of the Government of Iraq and with the consent of the Security Council’s 661 sanctions committee. 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 beginning of the programme, humanitarian supply contracts worth some $31.3 billion 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. Of this amount, $18.9 billion worth of humanitarian supplies and equipment, thus far, have been delivered to Iraq, including $1.1 billion worth of oil industry equipment. Another $10.7 billion worth of humanitarian supplies and $1.7 billion worth of oil industry equipment are in the production and delivery pipeline.

Only two contracts, worth $0.95 million, were released from hold by the 661 Committee during the week in review, while 63 new contracts, worth $109.8 million, were put on hold by the Committee. Altogether, 1,997 contracts, valued at $5.15 billion, were on hold for the purchase of various humanitarian supplies and equipment, of which 1,379 contracts, worth $4.47 billion, were for humanitarian supplies and 618 contracts, worth $676 million, were for oil industry spare parts and equipment.

In the “inactive holds” category, there were 222 contracts, worth $342.7 million, for which the suppliers had not provided the additional technical information in over 60 days, as requested by the “holding” Committee member(s). In the category of “active holds”, there were 525 contracts, worth more than $1.7 billion, for which although the suppliers had provided the requested information over 60 days ago, the “holding” Committee member(s) had not yet made a final decision.

As at 25 January 2002, about $1.8 billion and €626 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