(26
October – 1 November 2002)
On 1 November 2002, a United Nations team of five
independent inspection agents arrived at Ar’ar crossing point at the border
of Iraq with Saudi Arabia, to finalise preparations for the establishment of a
UN inspection site at this border crossing point. The inspection site at
Ar’ar, which will become fully operational on 8 November 2002, will be the
fifth authorized border crossing for the import of goods under the
oil-for-food programme. United Nations independent inspection agents at
authorized points of entry confirm
and authenticate the delivery of humanitarian supplies to Iraq under the
oil-for-food programme only. The other four authorized entry points are:
Trebil, at the border of Iraq and Jordan; Al-Walid, at the border of Iraq and
Syria; Zakho, on the border of Iraq with Turkey and; Port of Umm Qasr in the
Gulf.
On 28 October 2002, the Security Council’s
661 sanctions committee approved a list of about 6,000 humanitarian supply
items. Contracts for the supply of these items will no longer require a review
by the United Nations Monitoring, Verification and Inspection Commission (UNMOVIC)
and the International Atomic Energy Agency (IAEA) or the 661 Committee, but
instead will be “fast-tracked” for approval by the Office of the Iraq
Programme (OIP). The list, developed jointly by OIP, UNMOVIC and IAEA under
the new set of procedures of Security Council resolution 1409 (2002), includes
all food items, basic medicines and medical supplies, furniture, printing
paper, teaching and educational supplies, agricultural seeds and fertilizers
and basic construction materials.
Averaging about 2.76 million barrels per day,
Iraqi oil exports under the programme jumped from the previous week’s low of
5.1 million barrels to 19.3 million barrels in the week ending 1 November.
Completed in 14 shipments –
eight from Mina-al-Bakr
loading terminal with 11.9 million barrels of oil and six from Ceyhan with 7.4
million barrels, the week’s exports netted an estimated €440 million (euros) or $430 million, at current prices and rate of
exchange. The
average price of Iraqi crude oil was approximately €22.65
or $22.30 per barrel.
Since the start of current phase XII of the programme on
30 May 2002, buyers of Iraqi crude oil have imported almost 179 million
barrels out of 475 million barrels of oil approved by the United Nations oil
overseers under 192 oil purchase contracts, including one new
contract approved during the week in review. Estimated revenue from these
exports stands at €4.32 billion or $4.31 billion. Phase XII ends on 25
November 2002. The Government of Iraq has budgeted the humanitarian programme
for the current phase at over $5 billion. With 72 per cent of the total oil
revenue being allocated to the humanitarian programme, as required under
Security Council resolution 1330 (2000), Iraq would need to export about $7
billion worth of oil during the current phase in order to meet its budgetary
target.
Iraq has exported some 3.2 billion
barrels of oil, since the beginning of the programme on 10 December 1996, at
an estimated $38.6 billion and €21.9 billion ($19.9 billion) in revenue.
Some $39 billion worth of contracts have been approved by the 661 Committee
and OIP for the purchase of various humanitarian supplies and equipment,
including about $3.5 billion worth of oil industry spare parts and equipment.
To date, about $24.9 billion worth of supplies and equipment have been
delivered to Iraq, including $1.5 billion worth oil spare parts and equipment,
while another $10.1 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.
Owing to a
revenue shortfall from earlier phases of the programme, currently 1,552
approved humanitarian supply contracts, worth about $2.99 billion, are without
funds and, therefore, cannot be delivered to Iraq. The sectors affected by the
revenue shortfall are: electricity with $560 million; agriculture with $539
million; food handling with $507 million; health with $309 million; housing
with $308 million; water and sanitation with $286 million; telecommunications
and transportation with $241 million; education with $235 million.
Out
of $5.93 billion worth of humanitarian supply contracts processed by the
United Nations Secretariat under the new set of procedures of Security Council
resolution 1409 (2002), contracts worth around $2.42 billion (40.7 per cent)
have been approved by OIP after having been assessed by UNMOVIC/IAEA as not
containing any Goods Review List (GRL) items, including a number of contracts
previously placed on hold by the 661 Committee. UNMOVIC/IAEA have categorized
$3.22 billion worth of contracts (54.3 per cent) as “GRL non-compliant”,
requiring additional technical information from suppliers to enable final
assessment. So far, $323 million worth of contracts (5.4 per cent) have been
found by UNMOVIC/IAEA to contain GRL items, of which $2.8 million worth have
been approved and $19.3 million worth rejected by the 661 Committee.
