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10 September 2002
Oil-for-Food Background Information


Weekly Update

(31 August- 6 September 2002)

Iraqi oil exports under the United Nations oil-for-food programme were down to a trickle at 2.6 million barrels in the week that ended on 6 September, with no shipments from Mina al-Bakr terminal for the second consecutive week. The last loading from that terminal was on 21 August.  Averaging approximately €25.25 (euros) or $25.10 per barrel and completed in three shipments from Ceyhan terminal, the week’s exports netted a mere €70 million or $69 million in estimated revenue, at current prices and rate of exchange.

So far in current phase XII of the programme, which began on 30 May 2002, buyers of Iraqi oil have lifted a total of almost 92 million barrels of oil, out of the 346 million barrels approved by the United Nations oil overseers under 154 oil purchase contracts.  Revenue generated from the exported oil is estimated at €2.25 billion or $2.23 billion. The phase ends on 25 November 2002.

A cumulative revenue shortfall since phase VIII of the programme has left 1,240 approved humanitarian supply contracts worth about $2.21 billion without available funds. The sectors affected by the revenue shortfall are: electricity with $393 million; agriculture with $373 million; food handling with $346 million; water and sanitation with $298 million; housing with $297 million; health with $242 million; education with $137 million; telecommunications and transportation with $110 million and; food with $16 million.

With Iraqi oil exports of some 3.1 billion barrels since the beginning of the programme on 10 December 1996, the estimated revenue now stands at $38.6 billion and €19.8 billion ($17.58 billion).  72 per cent of the oil proceeds are earmarked for the humanitarian programme.  To date, almost $37 billion worth of contracts for the purchase of various humanitarian supplies and equipment have been approved by 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.  Over $24.3 billion worth of supplies and equipment have reached Iraq, including $1.5 billion worth oil industry equipment, while another $9.7 billion worth of supplies and equipment, for which funds have been available, are in the production and delivery pipeline, including $1.7 billion worth of oil industry equipment.

The implementation of the new set of procedures under Security Council resolution 1409 (2002) began on 15 July 2002.  Since then, some $354 million worth of supplies under 337 contracts previously on hold by the 661 Committee, have now been re-assessed as not to contain Goods Review List (GRL) items and, therefore, approved by OIP. There are now 1,475 humanitarian supply contracts on hold worth over $4 billion, of which 1,008 contracts worth about $3.5 billion are for humanitarian supplies and 467 contracts worth $585 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.  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 the International Atomic Energy Agency (IAEA) in mid-October, it is foreseen that 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