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23 July 2002
Oil-for-Food Background Information


Weekly Update

(13 - 19 July 2002)

Ramiro Lopes da Silva of Portugal arrived in Iraq on 19 July and assumed the responsibilities of the United Nations Humanitarian Coordinator in Iraq. Mr. Lopes da Silva was appointed to the post by the Secretary-General on 31 May 2002 and succeeded Tun Myat, who had served in that capacity since April 2000. The Office of the Humanitarian Coordinator in Iraq is an integral part of the Office of the Iraq Programme (OIP), with the Coordinator reporting to the Executive Director of OIP, Benon V. Sevan.

At an average rate of 1.4 million barrels per day, Iraqi oil exports under the United Nations oil-for-food programme registered their highest single weekly volume at 9.8 million barrels in current phase XII of the programme, which began on 30 May 2002. The exports were completed through six loadings, four of which were from Mina al-Bakr terminal, with 8 million barrels of oil, and two loadings from Ceyhan terminal, with 1.8 million barrels. With the price of Iraqi crude oil averaging approximately €24.30 (euros) or $24.50 per barrel, the week’s exports netted an estimated €238 million or $240 million in revenue, bringing the overall estimated revenue in phase XII to over €1.22 billion or $1.23 billion.

There are now 131 approved oil purchase contracts in this phase, including four new contracts approved by the United Nations oil overseers during the week in review. The volume of oil covered by these contracts is 277 million barrels, almost 51 million barrels of which have already been lifted. Phase XII ends on 25 November 2002.

Iraq has exported about 3.1 billion barrels of oil, since the beginning of the programme on 10 December 1996, for an estimated $38.6 billion and €18.8 billion ($16.8 billion) in revenue. The humanitarian programme receives 72 per cent of the oil proceeds, with 59 per cent allocated to the 15 central and southern governorates and 13 per cent to the three northern governorates. To date, some $35.8 billion worth of contracts for the purchase of humanitarian supplies and equipment have been approved by the Security Council’s 661 sanctions committee and OIP, including about $3.3 billion worth of oil industry spare parts and equipment. Supplies and equipment worth $23.5 billion have been delivered to Iraq, including $1.4 billion worth oil spare parts and equipment. Another $10.2 billion worth of supplies and equipment are in the production and delivery pipeline, including $1.8 billion worth of oil industry equipment.

As a result of an accumulative revenue shortfall, 996 humanitarian supply contracts, worth almost $2.1 billion, while approved by the United Nations, cannot be further processed because of a lack of funds. The affected sectors are: electricity with $351; food handling with $322 million; food with $299 million; housing with $286 million; agriculture with $270 million; health with $157 million; telecommunication and transportation with $156 million; water and sanitation with $143 million and; education with $104 million.

There are currently 2,172 humanitarian supply contracts, valued at about $5.4 billion, placed on hold by the 661 Committee, of which 1,498 contracts, worth $4.6 billion, are for humanitarian supplies and 674 contracts, worth $780 million, are for oil 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. The re-circulation of contracts on hold in the second category is expected to be completed by mid-September. It is foreseen that upon the completion of these processes, there will no longer be contracts on hold. OIP began the full implementation of the new procedures on 15 July 2002. 

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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