February 21, 2004

The Honorable Ted Stevens
Chairman, Committee on Appropriations
United States Senate
Room S-128, The Capitol
Washington, D.C. 20510
Re: Dec. 2003 Oil Report
 

Dear Mr. Chairman:

In accordance with Section 2215 of the Fiscal Year 2004 Emergency Supplemental Appropriations Act (Public Law 108-106), I submit the following report regarding Iraqi crude oil production, oil revenues, and the use of those revenues for the month of December 2003.

Iraqi crude oil production for December was 66.4 million barrels. Of this 18.5 million barrels went to domestic production and 47.8 million barrels were sold for export of an aggregate revenue totaling $1.3 billion. Average price per barrel was between $26 and $27. The average production per day was 2.14 million barrels, which exceeded the year-end target of 2.0 million barrels per day. Crude oil production comes from two major areas, the southern oil fields near Basra and the northern oil fields near Kirkuk, with the majority of production occurring in the south. Because the Iraq-Turkey Pipeline remains closed, currently no crude oil is exported through the Turkish port of Ceyhan, and all exports go through Al-Basra Oil Terminal (ABOT). Iraqi oil revenues are limited by production capability and export capacity.

Export revenues for the month of December were $1.3 billion. Five percent of Iraqi oil revenue is allocated to Kuwaiti war reparations, which totaled $65.6 million. The remaining 95 percent is deposited in the Development Fund for Iraq (DFI), which receives deposits from multiple funding sources and is used to support and finance the Iraqi Government’s budget. Total oil revenues deposited into the DFI for the month of December were $1.2 billion. To date, disbursements from the DFI have been in support of the wheat purchase program, currency exchange program, electricity and oil infrastructure programs, Iraqi security forces equipment, Iraqi civil service salaries, and ministry budget operations.

I trust you will find this information helpful. I have provided an identical letter to the Chairman and Ranking Member of the House Appropriations Committee. We will update this report each month as required by the Act. In the meantime, please do not hesitate to contact me if I can be of further assistance to you on this matter.



CC: The Honorable Robert C. Byrd
Ranking Member

Enclosure:
As stated