Here is an update filed this morning by the same contact who has provided us previous updates on the Saudi oil ports.

"Allow me to offer some first hand, in the trenches, up close and personal observations. In case you havn't kept up with current events I am curently in the mid-east at the behest of a major petroleum company frantically attempting to alleviate the Y2k impact here.

Factoid:
here on the Saudi Peninsula there has been little to no Y2k work done at all. Reason? There has been a perception that it isn't a problem because the American Media has consistently disregarded it. So, it isn't a problem for the international set. The Mid-east is now awakening to the potential and will have it fixed soon right? Ehhhh... Wrong!!.. most of the oil ports here rely nearly 100% on computer (PLC's not COBOL) controlled systems for the preliminary cracking of the crude and for the control for shipment. These are the "embedded systems" that we keep hearing about.

First problem...identification. over half of the systems are in areas that do not allow ready access to the unit for testing. So we have to use statistical analysis of type failures. Bad news. 100% infant mortality of the most common PLC. So replace them, right? Ehhhh... another wrong answer... at this rate you will never win the Ronco electric dog polisher... The ONLY way to replace them is to take the WHOLE facility off line for about hmmmm.. 4 months... Now, it should be noted that this is the "premier" facility in the mideast accounting for about 45-50% of petro shipments. Contingency plan.... BUILD (yes I said build) a series of work arounds that could be put inplace with manual controls to attempt to keep the facility running. But even with that we are going to have to let the master system fail and the cut the manual valving into the system one location at a time (manpower problem)Otherwise we are right back at the same problem of taking the whole facility down.. OBTW we can't test this first so it is gonna get dicey as we attempt to guesstimate pressure and flow (previously handled by the computer) and will probably have the system operational in 30 to 40 days. THEN we will begin to replace the PLC's. And just in case you haven't caught on yet that means NO Crude from this facility AT ALL!! for at least 30 days. The Iraqi facility up at Basra is gonna crap out as well as the Yemeni port. Oh yeah, it is only a three day storm cum "bump in the road" right??"

-- Dog Gone (layinglow@rollover.now), September 30, 1999

Answers

Dammit.

Thanks, Dog Gone

-- lisa (lisa@work.now), September 30, 1999.

Nice to see the report that I anticpated Dog. But the Pollys on that other forum are still at it. The "conspiracy of the left" as I like to call it is still using propoganda despite the fact that few companies have yet to come out and proclaim full Y2K COMPLIANCE. What an interesting fact they continue to deny. And for real kicks go read the Unisys paper which projects 8 million failures. That left an interesting taste in my mouth....and I think that taste was an MRE. Keep up the good work, and make sure you're home by Christmas.

-- John Galt (jgaltfla@hotmail.com), September 30, 1999.

Dog One, Good post. Good info. You da man. No, you da DOG.

The Saudis have the funds, the credit line and the cash flow. Consider all the other economic basket cases that were hammered with $12 crude economics at the start of the year right when they needed remediation funds.

I'm still betting the Saudis will rig up work arounds. Also consider the Saudis are the one world crude producer with plenty of excess production capacity. The OPEC quota dictates 8 m barrels/day. Their maximum capacity is probably up around 11. They can pump crude and stockpile it in tankers without violating OPEC quotas. We're probably already seeing this from the Iranians. I'm betting the Saudis are thinking they can come up with workarounds in time, but if not we'll see some tanker time charters and stockpiling. Either way they'll be able to 'export' 8 m bls/day right thru the rollover. ARAMCO expertise is gonna get them through this.

-- Downstreamer (downstream@bigfoot.com), September 30, 1999.

Downstreamer

Do you have any reason to believe that there is a big surplus of idle supertankers sitting around? They are damn expensive and it doesn't seem likely from a current economic standpoint. Oil was around 10 bucks a barrel earlier this year, not exactly the time to be building supertankers that you don't need.

It's an interesting concept if the surplus ships exist, though.

-- Dog Gone (layinglow@rollover.now), September 30, 1999.

Dog, A couple of comments. First, can you personally vouch for the bona fides of this person? For my sake and for the forum, will you review his background and position as much as possible?

Next comment, people are going to be dubious about oil field/production/transportation claims. Rightly or wrongly, we all remember about how it was predicted to take years to extinguish all the well head fires after the Gulf war. Now we've all seen the National Geographic special about how they did it in a fraction of the time. Now that is not directly related to y2k, but ever since 1973, we (Americans) have naively overreacted to threats of being weaned from the sugar teat of the Persian Gulf. None of the threats have materialized. Y2k may be the real thing, but the media and environmental groups (including those I have supported) have talked oil shortages for so long that this last cry of "Wolf!" will never be heard. Especially since the media is ignoring it.

-- Puddintame (achillesg@hotmail.com), September 30, 1999.

---

92 days left.

Do you think everything's just peachy keen at U.S. refineries?

Think again.

---

-- no talking please (breadlines@soupkitchen.gov), September 30, 1999.

Sure would like to see a detailed technical analysis of a failing PLC, and why the system would not tolerate rolling back the clock. Sure seems like replacing these devices is overkill. At worst, it seems like you could roll back clocks in the PLCs and recode the control system to compensate, shifting dates sent to and from the devices.

Has anyone seen a document like this? Does anyone have any idea why it is not available? If remediation is being done at all, someone must have done this analysis.

-- Michael Goodfellow (mgoodfel@best.com), September 30, 1999.

Puddintame

He is who he says he is. I know his real name and although I've never met him, I've had conversations with him over the past couple of years, and certainly before this rush assignment to the Middle East. He is prominent enough in the business that you could probably figure out who he is if you took the effort. He is well-respected and has personally met with high-ranking oil officials in most of region.

I don't think there's a chance in hell that what he wrote this morning is not accurate. He's going to assess the ports in Oman and Yemen next, and Paul Hepperla or I will let you know what he says when we hear from him next.

-- Dog Gone (layinglow@rollover.now), September 30, 1999.

Dog One,

The Saudis have had tanker stockpiling programs in the past that racked up huge volumes. If memory serves, we've seen Mideast OPEC floating stockpiling programs as high 80-90 mil barrels with about half of this attributed to the Saudis. I'm gonna concede that I'm going back to late '80s time frames. Tanker fundamentals have changed a lot since then. I don't know if anyone like Gordo can quantify how much tonnage would be available and how much these fundamentals have changed in a decade.

There's a lot more onshore tankage in places like the Carbibean also. Since the Saudis are shipping about 1.5 mbls a day of their output here to the US, that'd work for a good deal of their inventory building program.

Crude futures ought to be at +$40 if this many 'in the know' oil industry people, including the Saudis, have identified problems that they aren't gonna be able to work around in time. We just settled at $24.50. If I were the Saudis and I knew I had these kinda probs and tanker storage won't suffice, I'd be buying all the oil futures contracts I could finance. I'll concede - maybe they are....

The higher this NYMEX & IPE futures rally goes, the more convinced I'll become. The stock market certainly wasn't worried today...

-- Downstreamer (downstream@bigfoot.com), September 30, 1999.

(A) Storage in tankers works if (and only if all):

(1) The tankers are compliant.

(2) The receiving ports are compliant.

(3) The receiving refineries are compliant.

(4) The distribution system for finished products is also compliant.

(5) There is a market (somebody has to have a job in order to have money to buy gasoline).

(B) The level of difficulty for a BITR depends on whether or not you are the bump.

(C) The Saudis may deem that letting the price of oil go up would be in their best interests... If they are down, and Iraq is down (along with a lot of other OPEC nations), prices will rise, and profits will be made...

(D) I've dealt with Saudis. Don't ever underestimate their business acumen. Some, a very few, are even technically proficient. I'd be willing to bet that they are working toward their own end game...

-- Mad Monk (madmonk@hawaiian.net), September 30, 1999.

I'm seeing a temporary dip in this market followed by another run up. The market is simply taking a breather. Unless we get some serious run cuts like the ones announced by BPA Europe yesterday (and I don't know if that's real or not due to recent gaming by BPA) crude will go higher.

If the boats on the water scenario is to play out, then we should be seeing a massive freight increase. Although freights have turned back upward again, especially to Asia from both WAF and Mid East, the worm has not turned fully upward yet. We are oh so close though. It's that time when the Lifo games begin and people start wondering where they'll end the year inventory wise. As I expect the "official party line" in washington (no i didn't say panty line) to change here shortly, I expect the POP of freights to come soon. Should be worth 5 worldscale as a total guesstimate. I'll keep ya posted. Thanks for the info. Keep it comming.

PS My next big call here is on Heating oil.....As we hit Nov and it gets cold the tertiary storage market is gonna heat up (pun intended). JQP is already ordering his first batch as I write this. Heat's gonna fly from it's depressed price SOON.

Just as sure as the Yen will rise in the east.

-- Gordon (g_gecko_69@hotmail.com), September 30, 1999.

Mad Monkey, I don't agree with most of your points. One could store crude in tankers without any of those compliant factors. Much of the non-LOOP crude coming in is lightered into smaller tankers anyway b4 it reaches US ports.

Gordo, Whats it gonna be? You've been screaming how these tanker rates are skyrocketing. I don't think they have been. If y2k probs are big as you contend, at companies like Mobil, LIFO would be the least of their probs, and especially this early.

Goodfellow brings up some good points that need to be responded to. How about his clock proposal? Where's the documentation? The best we can do is some nebulous 3rd party contention?

-- Downstreamer (downstream@bigfoot.com), September 30, 1999.

Downstreamer...

Another interesting bit of information to get would be:

What is the ratio of technically qualified remediaters to remediation tasks to be performed?

In other words, how many years will this take?

-- no talking please (breadlines@soupkitchen.gov), September 30, 1999.

Downstreamer,

Regarding Michael Goodfellow's: "At worst, it seems like you could roll back clocks in the PLCs and recode the control system to compensate, shifting dates sent to and from the devices."

I hesitated to comment on this, hoping that someone closer to the world of process control might do so. My acquaintance with process control was very indirect, and was limited to some processes used at the refinery and some others used in the research lab. So my comments here can only be of a generic nature.

The trick of rolling back the clocks can often be used quite well in "stand alone" devices and/or in devices that do not include date/time info in communications with other devices.

Michael G's comments suggest that the PLCs at issue do include date/time info while communicating with other devices. He suggests that those other devices be reprogrammed to do appropriate date shifting. Such reprogramming of process control devices in the field, while conceptually simple, can be problematic. Of course, these are generic comments not based on any specific information about the particular devices in question.

YMMV,

Jerry

-- Jerry B (skeptic76@erols.com), October 01, 1999.

For a truly harrowing updated read on the coming collapse of oil and therefore civilization, click on this thread:

Oil Chat

For those of you who have come to Yourdon's Forum from Gary North's link today. Welcome.

-- indicators (how@bad.it.really.will.be), November 01, 1999.

A year ago many thought that the grid was going to be the Achilles' heel, but now it appears it is going to be oil. After reading this post and Oil Chat, I am trying to accumulate similar good articles on the coming oil catastrophe to try to convince the many, many DGI's I am in touch with.

Would appreciate any leads.

-- Alan (alandonnaj@aol.com), November 01, 1999.

I think you should accumulate gasoline instead.

-- Dog Gone (layinglow@rollover.now), November 01, 1999.

This information corresponds with two other pieces of information I have. First, the Senate Y2K Committee 100 Day Report made it sound like the oil from OPEC countries was at medium to high risk and they mentioned potential availability problems and higher prices.

Second, I'm a certified business and personal astrologer and it definitely looks like oil prices will continue to go up a lot more through at least March and possibly April, (probably along with prices of everything else, if availability is this limited). Astrologically, next year is very tough for transportation, especially overseas stuff, but even local stuff has it's share of problems. If lack of gasoline is the culprit, that would explain a lot.

Madeline G-B

-- Madeline G-B (mgb@astro-cycles.com), November 03, 1999.

I would like to interview the source for these updates on the Saudi oil ports. Could someone kindly forward this message to that person? His or her name will be kept confidential if desired.

Thanks,

Amara D. Angelica Staff writer, TechWeek magazine

-- Amara D. Angelica (amaraa@techweek.com), November 04, 1999.

Amara,

I'll pass your request on to him. I do not believe he reads this forum.

-- Dog Gone (layinglow@rollover.now), November 08, 1999.