(30 March - 5 April 2002)
The implementation of the humanitarian programme pursuant to
Security Council resolution 986 (1995) has been increasingly facing financial
difficulties due to the substantial drop in revenues received from Iraqi oil
exports under the United Nations oil-for-food programme.
The distribution plan for phase XI submitted by the
Government of Iraq and approved by the Secretary-General was budgeted at $4.6
billion. As at 8 April 2002, the total volume of oil loaded was 202.8 million
barrels, with an estimated revenue of €4.4 billion (euros) or $3.9 billion,
at current prices and rate of exchange. Until the decision taken by the
Government of Iraq to suspend oil exports for a period of 30 days, effective 8
April 2002, it was estimated that the total oil revenues received from the
export of oil under the programme during phase XI would be $5.5 billion, which
would make available $4 billion to the programme, after the deductions
pursuant to relevant resolutions of the Security Council.
The decision of the Government of Iraq to suspend its oil
exports for a period of 30 days, effective 8 April, is estimated to reduce the
total revenues received under the programme by some $1.3 billion during phase
XI, ending 29 May 2002. Accordingly, it is now estimated that total revenue
received from oil exports under the programme during phase XI, will be $4.2
billion, which would provide an estimated $3 billion to the programme, after
the deductions pursuant to relevant resolutions of the Security Council.
The total shortfall in the budget for phase XI by an
estimated $1.6 billion is also compounded by the transfer of approved
applications from previous phases for funding purposes. As at 8 April 2002,
there were 824 approved applications from previous phases, with a total value
of just under $2 billion, for which funds were not available. Accordingly, the
cumulative estimated shortfall in funds for the purchase of humanitarian
supplies under the programme, as at 8 April, is $3.6 billion, excluding the
additional funds which would be required to cover applications which are
presently on hold by the Security Council Committee established by resolution
661 (1990). The total value of applications on hold is over $5 billion. About
$1.7 billion and €70 million were still available in the United Nations Iraq
Account, which however, have been put aside for the purchase of oil spare
parts and humanitarian supplies under special allocation aimed at addressing
the needs of especially vulnerable groups.
In terms of Iraqi oil exports in the week ending 5 April
2002, there was a sharp drop in the total volume from the previous week’s
high of 16.5 million barrels to 7.8 million barrels. The loadings, four in
all, were divided between three from Mina al-Bakr terminal, with 5.9 million
barrels of oil, and one from Ceyhan, with 1.9 million barrels. At the average
price of approximately €27.4 or $24 per barrel, the week’s exports netted
an estimated €214 million or $187 million in revenue, at current prices and
rate of exchange.
The total number of oil purchase contracts approved by the
United Nations oil overseers rose to 149, with an additional six contracts
approved during the week in review. The volume of oil covered under these
contracts reached roughly 356 million barrels, of which 207 million barrels
were for Basrah Light and 149 million barrels for Kirkuk crude. An
estimated $38.6 billion and €16.8 billion ($14.7 billion) in revenue
has been earned from the export of some 3 billion barrels of oil since
the start of the programme on 10 December 1996.
During the course of the programme, some $33.6
billion worth of humanitarian supply contracts have been approved by the 661
Committee and “fast-tracked” by the Office of the Iraq Programme (OIP),
including some $3 billion worth of contracts for oil industry spare parts and
equipment. These contracts have been approved under both the 59 per cent and
13 per cent accounts, which together receive 72 per cent of the oil export
revenues. To date, approximately $20.8 billion worth of humanitarian supplies
and equipment have been delivered to Iraq, including $1.3 billion worth of oil
industry equipment, while another $11 billion worth of humanitarian supplies
and $1.8 billion worth of oil industry equipment are in the production and
delivery pipeline.
In reversal of last week’s downward trend, the total value
of contracts placed on hold by the 661 Committee rose by $40 million. The 41
new contracts, worth $98 million, placed on hold by the 661 Committee
outweighed the 34, worth $59 million, which were released from hold. The total
value of holds covered 2,044 contracts for the purchase of various
humanitarian supplies and equipment, of which 1,399 contracts, valued at about
$4.4 billion, were for humanitarian supplies and 645 contracts, worth 693
million, were for oil industry spare parts and equipment.
In the category of “inactive holds” there were 229
contracts at $458 million, for which suppliers had not provided the additional
technical information requested by the “holding” Committee member(s) in
over 60 days. At the same time, in the category of “active holds”, the
number of contracts pending feedback from the holding Committee member(s) in
excess of 60 days following the provision of additional information by
suppliers, continued to decrease further and now stood at 507 contracts, worth
some $1.7 billion.
