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7 January 2003
Oil-for-Food Background Information


Weekly Update – 7 January 2003

Secretary-General Approves Iraq Distribution Plan for phase Xlll of Oil-for-food Programme

 The Secretary-General has approved the phase Xlll distribution plan submitted by the Government of Iraq for the delivery of food and other humanitarian supplies through the UN oil-for-food programme.  

The approved plan forwarded to the President of the Security Council on 6 January, totals US$4.93 billion. Although less than Iraq's submission for phase Xll ($5 billion), the plan maintains the food sector's share at almost $1.27 billion. The balance, covering 24 other sectors, includes: $359.5 million for the rehabilitation of water supply and sanitation systems, more than $272 million for electrical power supply, $143 million for the medical sector, and a special allocation of almost $344 million for especially vulnerable groups. 

Oil exports

Iraqi exports under the United Nations oil-for-food programme totaled 13.1 million barrels for the week ending 3 January – an average of about 1.9 million barrels per day.

There were 10 loadings for the week (28 December 2002 – 3 January 2003) from the authorized terminals: five from the Iraqi port of Mina al-Bakr (8.0 million barrels) and five from the Turkish Mediterranean port of Ceyhan (5.1 million barrels). These are the only outlets for Iraqi oil exports allowed under the oil-for-food programme.

Total exports for the week (13.1 million barrels) generated estimated revenue of €355 million (euros) or $369 million, at current prices and rates of exchange. The average price of Iraqi crude for the reporting period was approximately €25.75 or $26.90 per barrel.

Six new contracts were approved by the oil overseers for the week (28 December – 3 January), bringing the current total to 80, covering 214 million barrels of oil. Estimated revenue generated from the beginning of phase Xlll (5 December – 3 June 2003) at the current rate of exchange, stands at $1.3 billion.

Contract Approvals  


Of a total 4,715 contracts for humanitarian supplies worth about $8.8 billion processed by the United Nations Secretariat under the Goods Review List (GRL) and new procedures under Security Council resolution 1409 (2002), the Office of the Iraq Programme has approved 3,351 contracts worth about $4.5 billion (51.5 per cent in terms of value) after assessment by the United Nations Monitoring, Verification and Inspection Commission (UNMOVIC) and the International Atomic Energy Agency (IAEA) that they do not contain items on the Goods Review List.

Approvals include 991 contracts worth more than $1.6 billion that had previously been on hold by the Security Council’s 661 Sanctions Committee. These have now been reviewed by UNMOVIC/IAEA under para 18 of the procedures of resolution 1409 (2002).  


Goods Review List  

Of the total contracts, 1,133 worth about $3.6 billion (41.7 per cent in terms of value) are on GRL Non Compliant status. UNMOVIC and IAEA will require additional technical information from suppliers to enable final assessments.

So far, 201 contracts worth $605.4 million have been found by UNMOVIC/IAEA to contain one or more GRL items. Of these, 100 contracts worth $223.3 million have been reviewed by the 661 Sanctions Committee, of which, 20 contracts worth $7.9 million have been approved. Eleven have lapsed because the suppliers have not submitted a petition within 30 working days of the denial.  Eight of the 84 contracts, worth $20.6 million, have been rejected because of a “high risk of diversion to military use.” An additional 52 contracts worth $176.7 million have been denied approval by the 661 Committee, pending appeal. 

Contracts containing GRL items represent 6.9 per cent, in terms of value, of all applications processed by the UN experts so far.

Humanitarian revenue shortfall  

Due to a cumulative oil revenue shortfall dating from phase VIII (9 June - 5 December 2000) through phase Xll of the programme, 2,298 UN-approved humanitarian supply contracts worth some $4.4 billion, currently lack funds. The sectors affected by the revenue shortfall are: agriculture ($776 million); food handling ($629 million); electricity ($471 million); health ($522 million); water and sanitation ($450 million); housing ($429 million); food ($384 million); telecommunications and transportation ($351 million); education ($345 million). 


Oil-for-food programme

The oil-for-food programme was established by the Security Council on 14 April 1995. Some 3.3 billion barrels of Iraqi oil valued at about $61.1 billion have been exported under the programme since December 1996. Of this amount, 72 per cent of the total has been allocated towards humanitarian needs nationwide since December 2000. The balance goes to: Gulf War reparations through a Compensation Fund (25 per cent since December 2000); UN administrative and operational costs for the programme (2.2 per cent) and costs for the weapons inspection programme (0.8 per cent).

Since December 1996 about $40.9 billion worth of humanitarian supplies, including $3.6 billion worth of oil spare parts, have been approved by the 661 Sanctions Committee and the Office of the Iraq Programme. Of this amount, some $25.9 billion worth of humanitarian supplies and equipment have been delivered to Iraq under the oil-for-food programme, including $1.6 billion worth of oil industry spare parts and equipment. An additional $10.4 billion worth of supplies are currently in the production and delivery pipeline.


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Produced for media and public information – not an official United Nations Document
For further information please contact Ian Steele Tel: 212 963 1646 email: steelei@un.org