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30 July 2002
Oil-for-Food Background Information


Weekly Update

(20 – 26 July 2002)

 The first batch of 14 humanitarian supply contracts, worth over $7.62 million, that had been previously placed on hold by the Security Council’s 661 sanctions committee, were approved last week following their re-assessment in accordance with paragraph 18 of the new procedures for the review and processing of contracts under Security Council resolution 1409 (2002). The full implementation of the new procedures began on 15 July. An assessment of these contracts by the United Nations Monitoring, Verification and Inspection Commission (UNMOVIC) and International Atomic Energy Agency (IAEA) found no Goods Review List (GRL) items and, as a result, the contracts were classified as “approved by the Office of the Iraq Programme (OIP approved)”. 

Paragraph 18 of the new set of procedures under resolution 1409 (2002) divides contracts on hold into two categories. The first category comprises contracts that contain “dual use” item(s), as determined by the United Nations Secretariat experts, which are returned to the submitting Mission or United Nations agency for possible re-submission under the new procedures. The second category includes all other contracts on hold which are 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 with the end of this process, there will no longer be contracts on hold.  There are now 2,141 contracts, worth over $5.39 billion, that had been placed on hold by the 661 Committee, of which 1,480 contracts, valued at about $4.6 billion, are for humanitarian supplies and 661 contracts, worth $774 million, are for oil industry equipment. 

In terms of Iraqi oil exports under the United Nations oil-for-food programme during the week in review, the total volume reached 8 million barrels, down from the previous week’s total of 9.8 million barrels.  In all there were seven loadings, three of which were from Mina al-Bakr terminal, with 3.2 million barrels of oil, and four loadings from Ceyhan terminal, with 4.8 million barrels. With the price of Iraqi crude oil averaging approximately €23.60 (euros) or $23.60 per barrel, the week’s exports netted an estimated €188 million or $189 million in revenue, bringing the overall estimated revenue in current phase XII of the programme to over €1.38 billion or $1.39 billion.  

The United Nations oil overseers approved six new oil purchase contracts, raising their total to 137, covering 289 million barrels of oil. So far in phase XII, which runs from 30 May to 25 November 2002, Iraq has shipped almost 59 million barrels of oil. 

Since the start of the programme on 10 December 1996, Iraqi oil exports of some 3.1 billion barrels have generated an estimated revenue of $38.6 billion and €18.9 billion ($17 billion). 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, almost $36 billion worth of contracts for the purchase of humanitarian supplies and equipment have been approved by the 661 Committee and OIP, including about $3.3 billion worth of oil industry spare parts and equipment. Supplies and equipment worth $23.6 billion have been delivered to Iraq, including $1.4 billion worth oil spare parts and equipment. An additional $10.2 billion worth of supplies and equipment are in the production and delivery pipeline, including $1.8 billion worth of oil industry equipment. 

With a persisting revenue shortfall, 1,001 humanitarian supply contracts, worth over $2.08 billion, are still awaiting funding, although already approved by the United Nations. The sectors affected by the lack of funds are:  electricity with $352 million; food handling with $323 million; food with $299 million; housing with $286 million; agriculture with $272 million; telecommunication and transportation with $157 million; health with $144 million; water and sanitation with $143 million and; education with $104 million.


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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