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Technology Stocks : Discuss Year 2000 Issues -- Ignore unavailable to you. Want to Upgrade?

To: John Mansfield who wrote (6169)	7/2/1999 11:22:00 PM
From: C.K. Houston	Read Replies (1) \| Respond to of 9818

International Energy Agency Posts Update Report Warning Of Some "Inevitable" Y2K Problems In Global Oil Industry 4. It is important that the public understand that some problems are inevitable. In such a dynamic IT domain, even the most careful inventory will omit some computer systems and software that may be susceptible to the problem. Furthermore, independent testing of systems that have reportedly been corrected has repeatedly uncovered additional Y2K problems. In integrated processes, such as refineries, the communication linkages between individual systems provide an area for further concern. A key finding of the Abu Dhabi conference was that while individual vendors were prepared to take responsibility for the Y2K compliance of their own equipment, they were unwilling to guarantee that it would function correctly when used in conjunction with those of other vendors ... 11. Oil and gas pipelines have been identified as an area of ongoing concern. Most potential problems lie in pipeline control and monitoring systems and a vulnerability to disruptions in the electricity supply. An example of this vulnerability was demonstrated in Iraq earlier this year. A missile destroyed a single repeater station used to pass flow and pressure information to the control centre on the Kirkuk - Ceyhan pipeline. Although the pipeline itself was reportedly undamaged, this "blinding" of the control centre resulted in the closure of this major export line for a week. The financial consequences of such closures are obvious. 12. Refineries have very high current utilisation rates throughout the world, often greater than 100% of the nameplate capacity, so even small problems can have a global impact. Most refineries operate highly complex and integrated production systems. As a result they face probably the highest risk of Y2K failure of any link in the oil supply chain. The ripple effect of refinery failures has the potential to affect regional oil product markets and eventually the crude oil market itself. 3. Offshore oil production is generally at greater risk than onshore production because of the accessibility problems encountered when testing subsea equipment. Checking subsea equipment is both expensive and time consuming. Problems in safety systems are of particular concern as they may precipitate platform shutdowns. Interdependence between oil and gas production is also of concern. Failures in onshore gas processing facilities would not only close offshore gas production platforms but also those oil platforms where associated gas was produced. Any failures in the gas supply chain would inevitably lead to fuel switching with some of that demand being directed toward oil. Shut-ins of offshore gas production might therefore be associated with a surge in oil demand, as for many consumers the rollover occurs in mid-winter and demand for heating is likely to be high. The political fallout arising from an inability to provide home heating could be significant. 14. The maritime industry is susceptible to risks in tankers (Y2K failure rates of 20% - 30% in onboard systems are commonly expected), congested waterways (particularly navigation) and port facilities. Modern tankers are highly automated and many have crews of only 12 - 15 members. Switching to manual controls in the event of failures in the automated systems is therefore not a practical option. Little information is available on the compliance of individual port facilities and no one body seems able to provide it. It is likely that coastguards will have to rely on historical records of general seaworthiness to determine the risk factor for individual vessels. Where compliancy certificates do exist, their value is questionable. Oil Demand Implications ... cbn.org Cheryl