Office of the Iraq Programme Oil for Food

17 September 2002

Oil-for-Food Background Information

Weekly Update

(7-13 September 2002)

Exports of Iraqi oil under the United Nations oil-for-food programme bounced back from the previous week’s low of 2.6 million barrels to 6.4 million barrels in the week leading to 13 September 2002. Averaging just over 914,000 barrels per day, the exports were completed in five shipments – four from Ceyhan loading terminal with 4.8 million barrels of oil and one shipment from Mina al-Bakr terminal with 1.6 million barrels. At an average price of approximately €26.35 (euros) or $25.75 per barrel for Iraqi crude oil, the week’s exports brought in €170 million or $165 million in estimated revenue, at current prices and rate of exchange.

The United Nations oil overseers approved three new oil purchase contracts. There are 157 such contracts in current phase XII of the programme for 354 million barrels of oil. So far, the contract-holders have shipped about 98 million barrels of oil from Iraq in this phase worth approximately €2.43 billion or $2.38 billion. Phase XII runs from 30 May to 25 November 2002. Of the total oil proceeds, 72 per cent is earmarked for the humanitarian programme. The Government of Iraq has budgeted the programme in this phase at $5.08 billion.

Despite the surge in the level of oil exports during the week, the cumulative revenue shortfall remained almost constant at just under $2.21 billion for 1,217 approved humanitarian supply contracts that are without funds. The sectors affected by the revenue shortfall are: food handling with $420 million; electricity with $393 million; agriculture with $369 million; housing with $267 million; water and sanitation with $250 million; health with $242 million; education with $139 million; telecommunications and transportation with $109 million and; food with $18 million.

Since the start of the programme on 10 December 1996, Iraq has exported some 3.1 billion barrels of oil for an estimated revenue of $38.6 billion and €20 billion ($18 billion). To date, almost $37.1 billion worth of contracts for the purchase of various humanitarian supplies and equipment have been approved by the Security Council’s 661 sanctions committee and the Office of the Iraq Programme (OIP), including about $3.3 billion worth of oil industry equipment. Over $24.5 billion worth of supplies and equipment have reached Iraq, including $1.5 billion worth oil industry equipment, while another $9.5 billion worth of supplies and equipment, for which funds have been available, are in the production and delivery pipeline, including $1.7 billion worth of oil industry equipment.

With the implementation of the new set of procedures under Security Council resolution 1409 (2002) on 15 July 2002, some $349 million worth of supplies under 337 contracts previously on hold by the 661 Committee, have now been re-assessed as not to contain Goods Review List (GRL) items and, therefore, approved by OIP. At the same time, the United Nations Secretariat experts sought additional information from suppliers on 132 contracts previously on hold worth $587 million, to enable them to make a final determination, while another $26 million worth of supplies under three contracts were found to contain GRL item(s). There remain 1,428 humanitarian supply contracts on hold worth about $3.97 billion, of which 974 contracts worth about $3.4 billion are for humanitarian supplies and 454 contracts worth $574 million are for oil industry spare parts and equipment.

Paragraph 18 of the new set of procedures divides contracts on hold into two categories. The first category comprises contracts that contain “dual use” item(s), as determined by the United Nations Secretariat experts, which are returned to the submitting Mission or United Nations agency for possible re-submission under the new procedures. The second category includes all other contracts on hold which are re-circulated by OIP under the new procedures. Following the re-circulation and re-assessment of these contracts by the United Nations Monitoring, Verification and Inspection Commission (UNMOVIC) and the International Atomic Energy Agency (IAEA) in mid-October, it is foreseen that there will no longer be contracts on hold. These contracts will either be approved or denied within specified timeframes.

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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		Weekly Update (7-13 September 2002) Exports of Iraqi oil under the United Nations oil-for-food programme bounced back from the previous week’s low of 2.6 million barrels to 6.4 million barrels in the week leading to 13 September 2002. Averaging just over 914,000 barrels per day, the exports were completed in five shipments – four from Ceyhan loading terminal with 4.8 million barrels of oil and one shipment from Mina al-Bakr terminal with 1.6 million barrels. At an average price of approximately €26.35 (euros) or $25.75 per barrel for Iraqi crude oil, the week’s exports brought in €170 million or $165 million in estimated revenue, at current prices and rate of exchange. The United Nations oil overseers approved three new oil purchase contracts. There are 157 such contracts in current phase XII of the programme for 354 million barrels of oil. So far, the contract-holders have shipped about 98 million barrels of oil from Iraq in this phase worth approximately €2.43 billion or $2.38 billion. Phase XII runs from 30 May to 25 November 2002. Of the total oil proceeds, 72 per cent is earmarked for the humanitarian programme. The Government of Iraq has budgeted the programme in this phase at $5.08 billion. Despite the surge in the level of oil exports during the week, the cumulative revenue shortfall remained almost constant at just under $2.21 billion for 1,217 approved humanitarian supply contracts that are without funds. The sectors affected by the revenue shortfall are: food handling with $420 million; electricity with $393 million; agriculture with $369 million; housing with $267 million; water and sanitation with $250 million; health with $242 million; education with $139 million; telecommunications and transportation with $109 million and; food with $18 million. Since the start of the programme on 10 December 1996, Iraq has exported some 3.1 billion barrels of oil for an estimated revenue of $38.6 billion and €20 billion ($18 billion). To date, almost $37.1 billion worth of contracts for the purchase of various humanitarian supplies and equipment have been approved by the Security Council’s 661 sanctions committee and the Office of the Iraq Programme (OIP), including about $3.3 billion worth of oil industry equipment. Over $24.5 billion worth of supplies and equipment have reached Iraq, including $1.5 billion worth oil industry equipment, while another $9.5 billion worth of supplies and equipment, for which funds have been available, are in the production and delivery pipeline, including $1.7 billion worth of oil industry equipment. With the implementation of the new set of procedures under Security Council resolution 1409 (2002) on 15 July 2002, some $349 million worth of supplies under 337 contracts previously on hold by the 661 Committee, have now been re-assessed as not to contain Goods Review List (GRL) items and, therefore, approved by OIP. At the same time, the United Nations Secretariat experts sought additional information from suppliers on 132 contracts previously on hold worth $587 million, to enable them to make a final determination, while another $26 million worth of supplies under three contracts were found to contain GRL item(s). There remain 1,428 humanitarian supply contracts on hold worth about $3.97 billion, of which 974 contracts worth about $3.4 billion are for humanitarian supplies and 454 contracts worth $574 million are for oil industry spare parts and equipment. Paragraph 18 of the new set of procedures divides contracts on hold into two categories. The first category comprises contracts that contain “dual use” item(s), as determined by the United Nations Secretariat experts, which are returned to the submitting Mission or United Nations agency for possible re-submission under the new procedures. The second category includes all other contracts on hold which are re-circulated by OIP under the new procedures. Following the re-circulation and re-assessment of these contracts by the United Nations Monitoring, Verification and Inspection Commission (UNMOVIC) and the International Atomic Energy Agency (IAEA) in mid-October, it is foreseen that there will no longer be contracts on hold. These contracts will either be approved or denied within specified timeframes.
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