Iraq decides to wait and see on Y2K oil disruption
September 29, 1999
Web posted at: 3:11 PM EDT (1911 GMT)
BAGHDAD (Reuters) -- Iraq's oil industry is not prepared to deal with the millennium bug and may well be forced to shut down production and exports at the turn of the year, a reliable industry source in Baghdad said on Wednesday.
The source told Reuters that Iraqi oil officials were aware of the year 2000 computer problem but had decided to avoid the multi-million dollar cost of dealing with it.
Asked what the oil ministry was doing to counter the Y2K changeover, the source said: "They are doing nothing."
There was no immediate comment from the oil ministry.
"There is awareness of Y2K but consultancy is very expensive. The alternative is to lose production over the millennium," the source said.
He said Iraqi crude pumping stations and export facilities were likely to be hit by the problem and that engineers would have to deal with disruptions ad hoc.
Iraq is now OPEC's third largest exporter, delivering an average of 2.4 million barrels a day to world markets over the last month.
"Any processing controllers by micro-processors such as distribution control systems or process logic controller (PLC) in computers manufactured prior to 1996 -- like the ones the Iraqis have -- will be unsafe to run any chemical or petro- chemical processes during the 2000 transition," the source added.
"That means most of Iraq's refinery, fertilising plants and gas plants will have to make a decision on shutting down the process or risking the effects of Y2K on their systems."
Process pneumatic systems in some refineries would not be affected, he added.
Iraq's oil industry, like all sectors of the economy, has been hit hard by U.N. sanctions imposed shortly after Iraqi troops invaded Kuwait in 1990.
Iraq is allowed under a deal with the United Nations to export oil worth $5.26 billion every six months to buy food and medicine and other essentials including spare parts to its oil industry.
Oil experts have marvelled for the past several years that Iraq has been able to lift its production and oil exports levels despite little funds for maintenance.
Iraq has continually produced and shipped more oil than experts hired by the United Nations have expected.
It is expected to surpass the ceiling of $5.26 billion for the first time under the current six-month phase of the oil-for-food deal, thanks mainly to the spectacular recovery of oil prices this year and increased production.
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