Iraq: UNOIP Weekly Update 11 Mar 2003

Situation Report
Originally published
Iraqi Oil Exports and Revenues Down for the Week
Iraqi oil exports and revenues under the Oil-for-Food Programme slipped to 10 million barrels and $287 million respectively for the week (1-7 March). Exports averaged 1.4 million barrels a day compared with 1.9 million barrels the previous week and an average of 1.73 million barrels per day during February.

There were seven loadings from the authorized terminals: three from the Iraqi oil platform at Mina al-Bakr (6.58 million barrels) and four from the Turkish Mediterranean oil terminal at Ceyhan (3.46 million barrels). These are the only outlets for Iraqi oil exports allowed under the Oil-for-Food Programme.

Total exports for the week (10 million barrels) generated estimated revenue of €260 million (euros) or $287 million, at current prices and rate of exchange. The average price of Iraqi crude for the reporting period was approximately €25.75 or $28.45 per barrel.

UN oil overseers approved four new oil purchase contracts for the week. The current total of approved contracts is 136, covering 361 million barrels of oil. Estimated revenue generated from the beginning of phase Xlll (5 December 2002 - 3 June 2003) at current prices and rate of exchange, stands at $4.3 billion for 153.8 million barrels of oil.

Contract Approvals

Of a total 5,973 contracts for humanitarian supplies worth $11.4 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 4,648 contracts worth about $7.2 billion (63.5 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 1,118 contracts worth about $2.2 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, 1,060 worth almost $3.4 billion (29.6 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, 303 contracts worth $1.1 billion have been found by UNMOVIC/IAEA to contain one or more GRL items. Of these, 144 contracts worth $197 million have been reviewed by the Security Council's 661 Sanctions Committee, of which, 31 contracts worth $15.0 million have been approved. Forty three contracts worth $50.9 million, have lapsed because the suppliers have not submitted a petition within 30 working days of the denial. Twenty nine of the 303 contracts, worth $60.6 million, have been rejected because of a "high risk of diversion to military use." An additional 36 contracts worth $69.4 million have been denied approval by the 661 Committee, pending appeal.

Contracts containing GRL items represent 9.8 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, 2,632 UN-approved humanitarian supply contracts worth some $5.1 billion, currently lack funds. The sectors affected by the revenue shortfall are: agriculture ($850 million); food handling ($808 million); housing ($666 million); electricity ($562 million); telecommunications and transportation ($454 million); water and sanitation ($491 million); food ($421 million); education ($400 million); health ($385 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 about $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 more than $43 billion worth of humanitarian supplies, including $3.8 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 $26.8 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 $10.1 billion worth of supplies are currently in the production and delivery pipeline.

For further information please contact Ian Steele email: