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15 October 2002
Oil-for-Food Background Information


Weekly Update

(5 – 11 October 2002)

 Iraqi oil exports under the United Nations oil-for-food programme registered an average low of about 600,000 barrels per day in the week ending 11 October. However, a number of vessels that began loading during the period in review, completed the process only over the weekend of 12 -13 October and these will be reflected in the following week’s export figures, thereby showing a considerable increase in export levels.   

Totalling 4.1 million barrels, the week’s exports were completed in four shipments – one from Mina al-Bakr terminal with one million barrels of oil and three from Ceyhan terminal with 3.1 million barrels. At an average price of  €26.10 (euros) or $25.70 per barrel, the exports generated an estimated €107 million or $105 million in revenue, at current prices and rate of exchange. 

The United Nations oil overseers approved seven new oil purchase contracts for 31.5 million barrels of crude oil, bringing their total in current phase XII of the programme to 185 approved contracts for 464.5 million barrels of oil. So far in this phase, the contract-holders have shipped 133.2 million barrels of oil out of Iraq, worth approximately €3.37 billion or $3.3 billion. Phase XII runs from 30 May to 25 November 2002. 

Iraq would need to export about $7 billion worth of oil during the current phase in order to meet its humanitarian programme budget of over $5 billion. 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).    

Since the start of the programme on 10 December 1996, Iraqi oil exports of some 3.2 billion barrels of oil have generated an estimated $38.6 billion and €20.9 billion ($18.9 billion) in revenue. With the monies allocated to the humanitarian programme from the total revenue, more than $38.3 billion worth of contracts have been approved by the Security Council’s 661 sanctions committee and the Office of the Iraq Programme (OIP) for various humanitarian supplies and equipment, including about $3.4 billion worth of oil industry equipment. Supplies and equipment worth over $25.3 billion have reached Iraq, including $1.5 billion worth of oil industry equipment. Another $9.7 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.

 A revenue shortfall from earlier phases of the programme has left 1,441 approved humanitarian supply contracts, worth over $2.68 billion without funds. The sectors affected by the revenue shortfall are: agriculture with $503 million; food handling with $485 million; electricity with $404 million; health with $290 million; housing with $289 million; water and sanitation with $273 million; telecommunications and transportation with $227 million; education with $192 million and; food with $19 million. 

Out of a total of 2,374 contracts for humanitarian supplies worth over $4.18 billion processed by the United Nations Secretariat under the new set of procedures of Security Council resolution 1409 (2002), based on the Goods Review List (GRL), 1,489 contracts worth about $1.89 billion (45.2 per cent) 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 828 contracts worth $2.19 billion (52.4 per cent) as “GRL non-compliant”, requiring additional technical information from suppliers to enable final assessment. So far, 57 contracts worth $98.2 million (2.3 per cent) have been found to contain GRL items, of which nine contracts have been approved and two rejected by the Committee.  One GRL-contract has lapsed in the absence of a petition from the supplier to the Committee. 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 $746 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 $1.75 billion worth of contracts previously on hold. GRL items have been found in 38 contracts previously on hold worth $86 million. There remain 637 contracts on hold worth about $2.2 billion, of which 435 contracts valued at $1.89 billion are for humanitarian supplies and 202 contracts worth $315 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