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22 October 2002
Oil-for-Food Background Information


Weekly Update

(12 - 18 October 2002)

With an unprecedented average of 3.03 million barrels per day, Iraqi oil exports under the United Nations oil-for-food programme reached a total of 21.2 million barrels in the week ending 18 October. Completed in 13 shipments, seven from Mina-al-Bakr with 13.5 million barrels and six from Ceyhan with 7.7 million barrels, the week’s exports tripled in volume, since the beginning of phase XII on 30 May, a period within which daily exports have fluctuated around 1 million barrels. Priced at an average of approximately €26.35 (euros) or $25.80 per barrel, the oil sales yielded an estimated revenue of €559 million or $547 million.

Since the beginning of current phase XII of the programme, which ends on 25 November 2002, total exports of Iraqi crude have amounted to 154.4 million barrels of oil out of 468 million barrels approved by the United Nations oil overseers under 188 oil purchase contracts, including three new contracts approved in the past week. The estimated revenue generated so far in this phase is €3.9 billion or $3.8 billion. 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.

Iraq has exported some 3.2 billion barrels of oil at an estimated $38.6 billion and €21.5 ($ 19.4 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, some $38.5 billion worth of contracts have been approved by the Security Council’s 661 sanctions committee and the Office of the Iraq Programme (OIP), for the purchase of various humanitarian supplies and equipment, including about $3.5 billion worth of oil industry spare parts and equipment. So far, about $25.3 billion worth of supplies and equipment have been delivered to Iraq, including $1.5 billion worth oil spare parts and equipment, while another $9.6 billion worth of supplies and equipment, for which funds have been set aside, are in the production and delivery pipeline, including $1.8 billion worth of oil industry equipment.

A cumulative revenue shortfall from earlier phases of the programme has left 1,528 approved humanitarian supply contracts, worth about $2.84 billion, without available funds. The sectors affected by the revenue shortfall are: agriculture with $538 million; food handling with $506 million; electricity with $416 million; health with $316 million; housing with $302 million; water and sanitation with $284 million; telecommunications and transportation with $235 million; education with $229 million and; food with $19 million.

Out of a total of 2,889 contracts for humanitarian supplies worth over $5.5 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), 1,652 contracts worth about $2.12 billion (38.5 per cent) have been approved by OIP after having been assessed by the United Nations Monitoring, Verification and Inspection Commission (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 1,146 contracts worth $3.2 billion (58.3 per cent) as “GRL non-compliant”, requiring additional technical information from suppliers to enable final assessment. So far, 93 contracts worth $204.7 million (3.7 per cent) have been found to contain GRL items, of which two were approved following submission of an amendment deleting GRL items, while nine contracts have been approved and three rejected by the Committee. Two GRL-contracts have 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 $943 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 $2.97 billion worth of contracts previously on hold. GRL items have been found in 71 contracts previously on hold worth $167.6 million. There remain 133 contracts on hold worth about $714 million, of which 92 contracts valued at $635 million are for humanitarian supplies and 41 contracts worth about $79 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