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13 August 2002
Oil-for-Food Background Information


Weekly Update

(3-9 August 2002)

With only four loadings, Iraqi oil exports under the United Nations oil-for-food programme plunged to almost half of the previous week’s total, standing at 4.4 million barrels in the week ending 9 August. Three loadings took place from Mina al-Bakr terminal, corresponding to 3.6 million barrels of oil, and one from Ceyhan terminal, corresponding to 0.8 million barrels. With an average price of approximately €24 (euros) or $23.35 per barrel, the week’s exports generated an estimated €104 million or $101 million in revenue, raising the overall estimated revenue in current phase XII of the programme to €1.7 billion or just under $1.7 billion.

Since the beginning of the current phase, the total volume of oil exported has amounted to 71.7 million barrels. Phase XII runs from 30 May to 25 November 2002. The United Nations oil overseers approved an additional four new oil purchase contracts during the week, bringing the overall total to 146, corresponding to 327 million barrels of oil, of which 185 million barrels are for Basrah light and 142 million barrels for Kirkuk crude.

Owing to the cumulative revenue shortfall, currently 1,156 humanitarian supply contracts, worth about $2.4 billion, while approved by the United Nations, are lacking in available funds. The affected sectors are: electricity with $386 million; food with $375 million; agriculture with $350 million; food handling with $335 million; housing with $294; water and sanitation with $232 million; health with $166 million; telecommunication and transportation with $164 million; and education with $114 million.

Iraq has exported almost 3.1 billion barrels of oil at an estimated $38.6 billion and €19.3 billion ($17.2 billion) in revenue, since the beginning of the programme on 10 December 1996. With 72 per cent of the oil proceeds allocated to the humanitarian programme, to date, some $36.2 billion worth of contracts for the purchase of various humanitarian supplies and equipment have been approved by both the Security Council’s 661 sanctions committee and the Office of the Iraq Programme (OIP), including about $3.3 billion worth of oil industry equipment. Of the approved contracts, over $23.8 billion worth of supplies and equipment have been delivered to Iraq, including $1.5 billion worth of oil industry equipment, while another $9.9 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.

There are now 2,020contracts, worth about $5.08 billion, previously placed on hold by the 661 Committee, of which 1,406 contracts, valued at about $4.4 billion, are for humanitarian supplies and 614 contracts, worth $738 million, are for oil industry equipment. Since the start of implementation of the new set of procedures under resolution 1409 (2002) on 15 July 2002, some $40 million worth of supplies under 55 contracts that were previously on hold, have been re-assessed as not to contain Goods Review List (GRL) items and therefore, 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. There are 1,808 contracts valued at over $4.5 billion in this second category. The re-circulation of these contracts will be completed by 15 September. It is foreseen that with the end of this process, 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