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16 July 2002
Oil-for-Food Background Information


Weekly Update

(6 - 12 July 2002)

In a letter dated 15 July 2002, addressed to the Chairman of the 661 Committee, H.E. Ole Peter Kolby (Norway), the Executive Director of the Iraq Programme, Mr. Benon V. Sevan, informed that the Office of the Iraq Programme has made all the necessary arrangements for the implementation of the revised procedures adopted by resolution 1409 (2002), effective Monday, 15 July 2002.

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.

With a slight decrease from last week’s total volume, the level of Iraqi oil exports under the United Nations oil-for-food programme totaled 5.1 million barrels in the week ending 12 July. The exports during the reviewed period netted an estimated revenue of €122 million (euros) or $120 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 € 973 million or $967 million. Of the five loadings during the week, four took place from Ceyhan comprising of 4.6 million barrels and only one from the second authorized terminal of Mina al-Bakr, with 0.5 million barrels of oil. The average price of Iraqi crude oil was approximately €24 or $23.70 per barrel.

The total volume of oil exported during phase XII, which runs through 25 November 2002, has amounted to 41.1 million barrels. With an additional four new oil purchase contracts approved by the United Nations oil overseers, the overall total stands at 127. The quantity of oil approved for export under those contracts corresponds to 266 million barrels, of which 142 million barrels are for Basrah light and 124 million barrels for Kirkuk crude.

Owing to a persisting revenue shortfall faced by the programme, 1,001 humanitarian supply contracts, worth about $2 billion, while approved by the United Nations, are currently lacking in funds and cannot be further processed. The affected sectors, in the order of the value of approved contracts without funds, are electricity with $351 million, food handling with $332 million, food with $300 million, housing with $286 million, agriculture with $270 million, health with $166 million, water and sanitation with $143 million, communication and transportation with $115 million, and education with $104 million.

Since the beginning of the programme on 10 December 1996, Iraq has exported more than 3 billion barrels of oil at an estimated $38.6 billion and € 18.5 ($ 16.5 billion) in revenue. With 72 percent of the oil proceeds allocated to the humanitarian programme, some $ 35.8 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 $3.3 billion worth of oil industry spare parts and equipment. So far, about $23.3 billion worth of supplies and equipment have been delivered to Iraq, including $1.4 billion worth oil spare parts and equipment, while another $10.4 billion worth of supplies and equipment, for which funds have been available, are in the production and delivery pipeline, including $1.8 billion worth of oil industry equipment.

During the week, the 661 Committee released from hold 50 contracts worth $43 million, while it placed on hold 79 new contracts worth $190 million. There are currently 2,200 contracts on hold for the purchase of various humanitarian supplies and equipment, valued at almost $5.5 billion. Of these, 1,524 contracts worth about $4.68 billion are for humanitarian supplies and 676 contracts worth $780 million are for oil industry spare parts and equipment.


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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