(17-23 August 2002)
With the implementation of the new set of procedures under
resolution 1409 (2002) on 15 July 2002, some $126 million worth of supplies
under 100 contracts previously on hold by the Security Council’s 661
sanctions committee, have now been re-assessed as not to contain Goods Review
List (GRL) items and, therefore, approved by the Office of the Iraq Programme
(OIP). These include a contract for 16 oxygen plants for the production of
medical oxygen valued at $58 million, which had been on hold for almost a year
because of “military dual use” concerns. There remain 1,877 humanitarian
supply contracts on hold worth about $4.7 billion, of which 1,294 contracts
worth about $4 billion are for humanitarian supplies and 583 contracts worth
$686 million are for oil industry spare parts and equipment.
Paragraph 18 of the new set of procedures 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. There are
163 contracts valued at $247 million in this category. The second category
includes all other contracts on hold which are re-circulated by OIP under the
new procedures. This process will be concluded by mid-September and with the
completion of their re-assessment by the United Nations Monitoring,
Verification and Inspection Commission (UNMOVIC) and by the International
Atomic Energy Agency (IAEA) in mid-October, it is foreseen that there will no
longer be contracts on hold.
Averaging just over 757,000 barrels per day, Iraqi oil
exports under the United Nations oil-for-food programme declined again from
last week’s slight surge at 7.2 million barrels to a total of 5.3 million
barrels during the week ending 23 August. Completed in six loadings, two from
Mina-al-Bakr with 1.5 million barrels and four from Ceyhan with 3.8 million
barrels, the week’s exports yielded an estimated revenue of
€140
million (euros) or $137 million, at current prices and rate of exchange. The
average price of Iraqi crude oil was approximately €26.50 or $25.85 per
barrel.
Total shipments of Iraqi crude, since the beginning of
current phase XII of the programme on 30 May 2002, have amounted to 84 million
barrels out of the 331million barrels approved by the United Nations oil
overseers under 148 oil purchase contracts. The estimated
revenue generated so far in this phase, which ends on 25 November 2002, is €2.07
billion or $2 billion.
Due to a cumulative revenue shortfall since phase VIII of
the programme, 1,116 approved humanitarian supply contracts, worth about $2.22
billion, remain without available funds. The sectors affected by the revenue
shortfall are: electricity with $392 million; agriculture with $340 million;
housing with $297 million; food handling with $296 million; water and
sanitation with $271 million; health with $ 223 million; food with $171
million; education with $125 million, and; telecommunications and
transportation with $109 million.
Since the beginning of the programme on 10 December 1996,
Iraq has exported some 3.1 billion barrels of oil at an estimated $38.6
billion and € 19.6 ($ 17.58 billion) in revenue. With 72 percent of the oil
proceeds allocated to the humanitarian programme, some $36.6 billion worth of
contracts for the purchase of various humanitarian supplies and equipment have
been approved by the 661 committee and by OIP, including about $3.3 billion
worth of oil industry equipment. So far, about $24.1 billion worth of supplies
and equipment have been delivered to Iraq, including $1.5 billion worth oil
industry equipment, while another $9.8 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.
