Office of the Iraq Programme Oil for Food

27 October 1998

Revised on 30 October

Oil-for-Food Background Information

The following is attributable to John Mills, Chief of Information of the Office of Iraq Programme, in response to a question regarding the non-arrival of oil spare parts and equipment

The OIP shares the Government's concerns about the need for the oil spare parts and equipment to arrive, be installed and contribute to maintaining or increasing the production and export of oil. This is why OIP's executive director Benon Sevan has spoken a number of times to the Security Council's 661 Committee on the urgency of expediting the approval of the contracts and reviewing further those contracts put on hold.

However, these are contracts between the Government and its suppliers. The United Nations Secretariat has no influence, beyond seeking to expedite the approval process and ensuring efficiency in the financial arrangements, on when the goods will arrive in Iraq.

It is also the case that many of the contracts are for equipment which is not readily available "off the shelf".

As one example: the first contract for oil spare parts under resolution 1175 (1998) was approved on 20 July for the supply of pipeline equipment from a Spanish company. The contract specifies a delivery period of up to 160 days.

Nonetheless there is work underway on Iraq's oil industry. Two gas turbine generators are on trucks in Baghdad ready to move to Jordan for shipment to the United Kingdom where they will be refurbished. The generators are used at the Zubair-1 pumping station where they are used to produce power for the pumps suppling oil to the loading platform at Mina Al-Bakr. The value of the contracts, approved by the 661 Committee under the terms of resolution 1175 (1998) is close to two million pounds sterling.

It is evident that the spare parts approved under the terms of resolution 1175 (1998) will not have an impact on revenue in the current Phase which ends on 25 November 1998. Iraq's oil industry will continue to need these spare parts and equipment - and much more besides - whether they arrive before or after 25 November.

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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

Oil-for-Food Background Information		The following is attributable to John Mills, Chief of Information of the Office of Iraq Programme, in response to a question regarding the non-arrival of oil spare parts and equipment The OIP shares the Government's concerns about the need for the oil spare parts and equipment to arrive, be installed and contribute to maintaining or increasing the production and export of oil. This is why OIP's executive director Benon Sevan has spoken a number of times to the Security Council's 661 Committee on the urgency of expediting the approval of the contracts and reviewing further those contracts put on hold. However, these are contracts between the Government and its suppliers. The United Nations Secretariat has no influence, beyond seeking to expedite the approval process and ensuring efficiency in the financial arrangements, on when the goods will arrive in Iraq. It is also the case that many of the contracts are for equipment which is not readily available "off the shelf". As one example: the first contract for oil spare parts under resolution 1175 (1998) was approved on 20 July for the supply of pipeline equipment from a Spanish company. The contract specifies a delivery period of up to 160 days. Nonetheless there is work underway on Iraq's oil industry. Two gas turbine generators are on trucks in Baghdad ready to move to Jordan for shipment to the United Kingdom where they will be refurbished. The generators are used at the Zubair-1 pumping station where they are used to produce power for the pumps suppling oil to the loading platform at Mina Al-Bakr. The value of the contracts, approved by the 661 Committee under the terms of resolution 1175 (1998) is close to two million pounds sterling. It is evident that the spare parts approved under the terms of resolution 1175 (1998) will not have an impact on revenue in the current Phase which ends on 25 November 1998. Iraq's oil industry will continue to need these spare parts and equipment - and much more besides - whether they arrive before or after 25 November. * *** *
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