4 March 2003

Weekly Update 

(22-28 February)

Iraqi Oil Exports Up – Yield is $370 million for Week

With Iraq’s oil exports averaging 1.9 million barrels a day during the week (22-28 February), the daily average under the Oil-for-Food Programme for the month closed 4.6 per cent higher than in January. Exports for the week totaled 13.2 million barrels compared with 11.9 million in the previous week.Total exports for February were 48.50 millions barrels – an average of 1.73 million barrels per day against January’s 1.66 million.

There were eight loadings from the authorized terminals: four from the Iraqi oil platform at Mina al-Bakr (8.0 million barrels) and four from the Turkish Mediterranean oil terminal at Ceyhan (5.2 million barrels). These are the only outlets for Iraqi oil exports allowed under the Oil-for-Food Programme.

Total exports for the week (13.2 million barrels) generated estimated revenue of €345 million (euros) or $370 million, at current prices and rate of exchange. The average price of Iraqi crude for the reporting period was approximately €26.65 or $28.70 per barrel.

UN oil overseers approved five new oil purchase contracts for the week. The current total of approved contracts is 132, covering 347 million barrels of oil. Estimated revenue generated from the beginning of phase Xlll (5 December 2002 – 3 June 2003) at current prices and at the current rate of exchange, stands at almost $4.0 billion for 143.8 million barrels of oil. 

Contract Approvals

Of a total 5,876 contracts for humanitarian supplies worth $11.2 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 4,527 contracts worth about $6.9 billion (61.9 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 1,107 contracts worth almost $2.1 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, 1,095 worth about $3.4 billion (30.6 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, 288 contracts worth $1.0 billion have been found by UNMOVIC/IAEA to contain one or more GRL items. Of these, 146 contracts worth $302.7 million have been reviewed by the Security Council’s 661 Sanctions Committee, of which, 30 contracts worth $15.0 million have been approved. Forty three worth $50.9 million, have lapsed because the suppliers have not submitted a petition within 30 working days of the denial. Twenty eight of the 288 contracts, worth $59.3 million, have been rejected because of a “high risk of diversion to military use.” An additional 40 contracts worth $172.4 million have been denied approval by the 661 Committee, pending appeal. 

Contracts containing GRL items represent 9.2 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, 2,555 UN-approved humanitarian supply contracts worth some $4.9 billion, currently lack funds. The sectors affected by the revenue shortfall are: food handling ($795 million); agriculture ($770 million); housing ($628 million); electricity ($561 million); food ($466 million); telecommunications and transportation ($452 million); water and sanitation ($414 million); education ($396 million); health ($374 million).

Oil-for-Food Programme

The oil-for-food programme was established by the Security Council on 14 April 1995. Some 3.4 billion barrels of Iraqi oil valued at almost $64 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 $43 billion worth of humanitarian supplies, including $3.7 billion worth of oil spare parts, have been approved by the 661 Sanctions Committee and the Office of the Iraq Programme. Of this amount, almost $26.7 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 $10.2 billion worth of supplies are currently in the production and delivery pipeline.