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8 October 2002
Oil-for-Food Background Information


Weekly Update

(28 September – 4 October 2002)

Averaging 1.4 million barrels per day, Iraq exported a total of 9.8 million barrels of oil under the United Nations oil-for-food programme in the week ending 4 October, netting an estimated €261 million (euros) or $258 million in revenue, at current prices and rate of exchange. Of the total seven shipments of crude oil out of Iraq, four were completed from Mina al-Bakr terminal, with 6.5 million barrels of oil, and three from Ceyhan terminal, with 3.3 million barrels. The average price of Iraqi crude oil was €26.65 or $26.30 per barrel. 

There are now 178 approved oil purchase contracts in current phase XII of the programme for 427.5 million barrels of oil, including eight new contracts approved by the United Nations oil overseers during the week in review for 22 million barrels of oil. So far in this phase, the approved contract-holders have shipped 129.1 million barrels of oil out of Iraq, worth approximately €3.26 billion or $3.22 billion. Phase XII runs from 30 May to 25 November 2002.

The Government of Iraq has budgeted the humanitarian programme for phase XII at over $5 billion. In order to make this amount available to the programme, after the necessary deductions under relevant Security Council resolutions, Iraq would need to export about $7 billion worth of oil during the current phase. The humanitarian programme receives 72 per cent of the oil revenue, with 25 per cent being allocated to the Compensation Commission, 2.2 per cent to the United Nations for the programme’s administrative costs and 0.8 per cent for the administration of the UN Monitoring, Verification and Inspection Commission (UNMOVIC). Total revenue in current phase XII is expected to reach $4.2 billion, leaving about $3 billion to be made available to the humanitarian programme.   

A similar revenue shortfall from earlier phases of the programme has left 1,379 approved humanitarian supply contracts, worth over $2.56 billion without funds. The sectors affected by the revenue shortfall are: agriculture with $505 million; food handling with $481 million; electricity with $399 million; housing with $279 million; health with $271 million; water and sanitation with $267 million; education with $175 million; telecommunications and transportation with $152 million and; food with $32 million. 

Iraq has exported almost 3.2 billion barrels of oil for an estimated revenue of $38.6 billion and €20.8 billion ($18.8 billion) since the start of the programme on 10 December 1996. With the monies allocated to the humanitarian programme from the total revenue, thus far, more than $37.6 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 $3.4 billion worth of oil industry equipment. Supplies and equipment worth almost $25 billion have reached Iraq, including $1.5 billion worth of oil industry equipment, while another $9.4 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. 

Since the start of implementation of the new set of procedures under Security Council resolution 1409 (2002) in July, based on the Goods Review List (GRL), the United Nations Secretariat has processed 1,987 contracts for humanitarian supplies and equipment worth almost $3.47 billion. Of this total, 63 per cent or 1,252 contracts worth about $1.51 billion have been approved by OIP after having been assessed by UNMOVIC and the International Atomic Energy Agency (IAEA) as not containing any GRL items, including a number of contracts previously placed on hold by the 661 Committee.  UNMOVIC/IAEA have categorized 689 contracts worth $1.91 billion (34.7 per cent) as “GRL non-compliant”, requiring additional technical information from suppliers to enable final assessment. So far, 43 contracts worth $44.2 million, or 2.2 per cent, have been found to contain GRL items, of which eight contracts have been approved and two rejected by the Committee, while the remainder are at various stages of action either by the suppliers or the Committee.

Under paragraph 18 of the new set of procedures, some $547 million worth of contracts previously on hold by the 661 Committee, have now been re-assessed as not to contain GRL items and, therefore, approved by OIP, while UNMOVIC/IAEA have requested additional information from suppliers on $1.6 billion worth of contracts previously on hold. There remain 886 contracts on hold worth about $2.74 billion, of which 621 contracts valued at $2.27 billion are for humanitarian supplies and 265 contracts worth $464 million are for oil industry equipment.

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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