Iraq: UNOIP Weekly Update 18 Mar 2003

Situation Report
Originally published
Iraqi Oil Exports and Revenues Rise
Oil exports continued to generate humanitarian revenues for the Oil-for-Food Programme during the week of 8-14 March. Exports and revenues reached 12.7 million barrels and $340 million respectively. The daily export average was 1.8 million barrels compared with 1.4 million barrels the previous week. The daily average for February was 1.73 million barrels.

There were eleven loadings from the authorized terminals: five from the Iraqi oil platform at Mina al-Bakr (6.4 million barrels) and six from Ceyhan (6.3 million barrels). These are the only outlets for Iraqi oil exports allowed under the Oil-for-Food Programme.

Total exports for the week (12.7 million barrels) generated estimated revenue of €317 million (euros) or $340 million, at current prices and rate of exchange. The average price of Iraqi crude for the reporting period was approximately €25.60 or $27.60 per barrel.

UN oil overseers approved four new oil purchase contracts during the week. The current total of approved contracts is 140, covering 373 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 $4.5 billion for 166.5 million barrels of oil.

Contract Approvals

Of a total 6,129 contracts for humanitarian supplies worth $11.6 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 4,820 contracts worth about $7.7 billion (66.7 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 1,129 contracts worth about $2.3 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, 1,035 worth $3.1 billion (26.9 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, 314 contracts worth almost $1.2 billion have been found by UNMOVIC/IAEA to contain one or more GRL items. Of these, 161 contracts worth $229.4 million have been reviewed by the Security Council's 661 Sanctions Committee, of which, 32 contracts worth $15.4 million have been approved. Forty nine contracts worth $55.1 million, have lapsed because the suppliers have not submitted a petition within 30 working days of the denial. Thirty of the 314 contracts, worth $60.6 million, have been rejected because of a "high risk of diversion to military use."An additional 47 contracts worth $97.6 million have been denied approval by the 661 Committee, pending appeal.

Contracts containing GRL items represent 10 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, 2,642 UN-approved humanitarian supply contracts worth some $5.4 billion, currently lack funds. The sectors affected by the revenue shortfall are: food handling ($932 million); agriculture ($845 million); housing ($703 million); electricity ($558 million); telecommunications and transportation ($532 million); water and sanitation ($497 million); food ($426 million); health ($406 million); education ($403 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 $44 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 $26.9 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.

Additional information is available from the website of the Office of the Iraq Programme. For further information please contact Ian Steele email: