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Weekly Update 10-16 April
Phase V Revenue could be around $3.4 billion - still
well below Iraq's needs
In the week from 10 to 16 April Iraq exported 12.4 million barrels of oil
in nine loadings. The estimated revenue was $171.7 million dollars. This
brings the total estimated revenue since the beginning of Phase V (26
November 1998 - 24 May 1999) to $2.721 billion.
The oil overseers and the Security Council's 661 Committee approved an
additional three contracts. The first to a Yemeni company for 1.8 million
barrels of Basrah Light for the USA; the second to a French company for 1.8
m barrels of Basrah Light for the far east and the third to a Bulgarian
company for 2 m barrels of Kirkuk crude for Europe.
So far in Phase V, Iraq has exported 269.7 million barrels of crude oil
(average 1.9 million barrels per day) for an average price of $10.09. At
current production rates and assuming the recent increase in the price of
oil is sustained, it appears likely that the revenue in Phase V could reach
$3.4 billion.
This would be sufficient to fund the Phase V distribution plan at the
level of the reduced allocations proposed by the Government of Iraq in March
(see OIP update of 19 March) which envisaged total expenditures of $2105.7
million. As well, the Government of Iraq and the United Nations are close to
reaching agreement on contracts for equipment to improve Iraq's
telecommunications infrastructure which will require funding in addition to
the revised allocation.
The Executive Director of the OIP, Benon Sevan cautioned that, although
the additional revenue was welcome, it would be unwise to rely too much on
the price of Iraqi oil remaining at its current level of close to $14 a
barrel. He noted that even the new estimates for Phase V revenue were still
more than $1.7 billion below the $5.2 billion authorised by the Security
Council and inadequate to meet many of the needs of Iraq's people.
Mr Sevan said the situation in Phase IV (30 May to 25 November 1998) had
been far worse creating an overall "humanitarian deficit" in
Phases IV and V of more than $2.5 billion.
So far this year, 43 contracts worth $144.4 million which were approved
by the 661 Committee but could not be funded because of the revenue
shortfall in Phase IV have been transferred to Phase V - a move which
assists in the timely and efficient delivery of humanitarian supplies to
Iraq but adds to the pressure on funding the Government's Distribution Plan
for Phase V.
During the week the 661 Committee approved a further three contracts for
the supply of humanitarian goods funded by revenue from Phase IV and 53
contracts with Phase V revenue.
Contract status for the supply of humanitarian goods as at
16 April 1999
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Received
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Approved
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On Hold
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| Phase IV |
769
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$1.68b
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660
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$1.5b
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49
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$88.8m
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| Phase V |
692
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$1.472
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457
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$1.076b
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46
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$50.5m
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In the reporting period from 10-16 April, OIP received 28 contracts for
the supply of oil industry spare parts and equipment worth $40,733,688. The
OIP has received so far 665 oil sector contracts with a total value of
$375,450,549.
During the same reporting period, the 661 Committee approved an
additional 22 contracts for $7,432,006 worth of oil industry spare parts and
equipment. One of these contracts was released from hold. The total number
of oil sector contracts approved to date is 431 worth $248,123,610. The 661
Committee put 7 oil sector contracts on hold last week worth $8,359,710. At
present, there are 104 contracts worth $42,506,390 on hold.
Humanitarian supplies continued to arrive in Iraq at the four entry
points authorized by the Security Council. Arrivals included 83,000 tonnes
of wheat, 33,669 tonnes of rice, 14500 tonnes of cooking oil and 34
consignments of medicines and health supplies including medical x-ray films,
angiogram equipment, diagnostic kits, paracetemol, cotton wool and gauze and
HIV test kits. Other supplies arriving included spare parts for power
distribution in Baghdad and the Nassairiya power station, pipes and pipe
couplings and compact water treatment units.
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