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25 June 2002
Oil-for-Food Background Information


Weekly Update

(15 – 21 June 2002)

With resumed loadings at Ceyhan terminal, Iraqi oil exports under the United Nations oil-for-food programme more than doubled from the previous week’s total low of 3.1 million barrels to an average of 1.1 million barrels per day in the week ending 21 June, or 7.7 million barrels in all. The week’s exports generated an estimated revenue of €185 million (euros) or $175 million, at current prices and rate of exchange, bringing the overall estimated revenue in current phase XII of the programme, which began on 30 May 2002, to €509 million or $491 million. 

Of the seven loadings during the week, six took place from Ceyhan with 5.8 million barrels and only one from the second authorized terminal of Mina al-Bakr, with 1.9 million barrels of oil. The average price of Iraqi crude oil was approximately €23.75 or $22.65 per barrel. 

The total volume of oil exported during phase XII, which ends on 25 November 2002, has amounted to 21.7 million barrels. With an additional 10 new oil purchase contracts approved by the United Nations oil overseers, the overall total stands at 106. The quantity of oil approved for export under those contracts corresponds to 203 million barrels, of which 114 million barrels are for Basrah light and 89 million barrels for Kirkuk crude. 

The persisting funding shortfall faced by the programme has resulted in 1,023 humanitarian supply contracts, worth about $2.26 billion, lacking in funds, although already approved by the United Nations. The affected sectors, in the order of the value of approved contracts without funds, are electricity with $344 million, food with $341 million, food handling with $338 million, housing with $303 million, agriculture with $274 million, health with $182 million, communication/transportation with $172 million, water and sanitation with $118 million, education with $105 million and oil spares/equipment with $78 million.  

Iraq has exported more than 3 billion barrels of oil at an estimated $38.6 billion and €18 billion ($16 billion) in revenue, since the beginning of the programme on 10 December 1996.  With 72 percent of the oil proceeds allocated to the humanitarian programme, some  $ 35.5 billion worth of contracts for the purchase of various 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 about $3.2 billion worth of oil industry spare parts and equipment. So far, about $22.8 billion worth of supplies and equipment have been delivered to Iraq, including $1.4 billion worth oil spare parts and equipment, while another $10.5 billion worth of supplies and equipment, for which funds have been available, are in the production and delivery pipeline, including $1.7 billion worth of oil industry equipment.  

During the week, the 661 Committee released from hold merely 3 contracts worth $8 million, while it placed on hold 37 new contracts worth $83 million. There are currently 2,152 contracts on hold for the purchase of various humanitarian supplies and equipment, valued at almost $5.3 billion. Of these, 1,474 contracts worth about $4.53 billion are for humanitarian supplies and 678 contracts worth $743 million are for oil industry spare parts and equipment.  

Paragraph 18 of the new set of procedures for the processing and review of contracts for humanitarian supplies and equipment under Security Council resolution 1409 (2002) requires that contracts currently on hold be divided into two categories.  The first category would comprise contracts that contain “dual use” item(s), as determined by the United Nations Secretariat experts, which will be returned to the submitting Mission or United Nations agency for possible re-submission under the new procedures.  The second category would include all other contracts currently on hold and will be re-circulated by OIP under the new procedures.  It is foreseen that upon the completion of these processes, there will no longer be contracts on hold.


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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