Check story posted on Bloomberg financial (Dec 19)

-- Early Riser (reader@browser.home), December 19, 1999

Answers

http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial% 20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=b lk&bt=blk&s=628e6e5ac58c4426f0689b3ea54ec664

Arab Gulf Oil Producers May Not Be Prepared for Millennium Bug, UN Says By Sean Evers

Arab Gulf Oil Producers May Not Be Prepared for Millennium Bug

Dhahran, Saudi Arabia, Dec. 19 (Bloomberg) -- Gulf Arab states responsible for half the world's oil reserves may not be adequately prepared for the year 2000 computer problem, the United Nations and U.S. government officials said.

Computer failure and resulting disruption to production and transportation facilities in the six Arab Gulf states -- Saudi Arabia, Kuwait, Oman, Qatar, the United Arab Emirates and Bahrain -- could boost oil prices, which have already more than doubled this year.

Governments and companies in the Middle East won't be ready for the date changeover on Jan. 1, 2000, due to a lack of funding to deal with the ``millennium bug'' computer glitch, the United Nations has said in a report. The bug is a theoretical problem that may cause some computers to malfunction if they misread the two-digit date ``OO'' as 1900 instead of 2000. ``It would have been nice if they had started a year or two> earlier, but we're optimistic there won't be any interruption in oil flow,'' said John Koskinen, chairman of the U.S. President's Council on Year 2000 Conversion. ``However, our oil inventories are sufficient to handle any eventuality for a few weeks.''

The U.S. government set up a reserve in 1975 to provide an emergency supply of oil in the event of a crisis, such as the Arab oil embargo of 1973. It currently holds about 573 million barrels of oil -- equal to two months of imports -- according to the Energy Department. The U.S. has tapped the reserve only once, in 1991, during the Persian Gulf War.

Oil companies doing business in the Gulf and local officials in the region said they are concerned about the lack of progress being made by government-run utilities, such as power and water.

Saudi Arabia Confident

However, Saudi Arabia, responsible for about 10 percent of the world's daily oil supply, said it is confident its computer systems will be ready to recognize the year 2000. ``Our worst case scenario would be to lose power for an extended period of time,'' said Saleh al-Zaid, head of the Y2K preparation team at Saudi Aramco, the state-owned oil company that exports more than 6 million barrels of oil per day. ``If that happened we would have enough oil stored at export terminals in the kingdom, Rotterdam and the U.S. to meet all our customers' requirements for about eight to nine days,'' he said.

Most of Saudi Arabia's critical oil installations have their own power plants. These include the Abqaiq facility, which can process 6 million barrels a day, as well as export terminals on the Gulf, gateway for 90 percent of its oil exports.

Mexico Ready, Too

Venezuela and Mexico, two other large exporters to the U.S., also said supplies won't be disrupted by computer breakdowns, and guaranteed all deliveries in the first days of 2000. They agreed to make up shortfalls in world output elsewhere if hobbled by the millennium bug.

Other Gulf producers, however, may not be in good shape.

Kuwait, which holds 9.3 percent of known global reserves, said the various components of its oil industry -- production, refining, shipping -- have different timetables for dealing with the computer bug. ``The production side is the most advanced and is finished testing,'' said Mifhari al-Obaid, an assistant managing director at the state-owned Kuwait Petroleum Corp. ``In an emergency we would be able to run manually if the data systems stop.''

At least one-third of all nations won't have fully tested and fixed their computers by Jan. 1, despite the expenditure of between $300 billion and $600 billion by the world's companies and governments, according to analysts. ``As far as some of the oil companies in the area, a lot of them have just looked at what we call the front- end IT systems, and have not looked at the embedded systems,'' said Ron Nelson, a Dubai-based Y2K computer consultant.

Hidden Threat

Embedded systems consist of computer chips used outside of computers -- in power-distribution equipment, pipeline pump controls and other devices. ``Everyone considered Y2K as a PC-based problem, when in reality it was much larger,'' he said.

U.S. companies are joining in the fight against time in the Persian Gulf. Exxon Mobil Corp. said it is working with its joint venture operations in Saudi Arabia to prepare for the bug. ``We have organized training workshops and set up different in-house committees to tackle this issue,'' said Curtis Brand, chief executive officer of Mobil Saudi Arabia Inc. ``We are ... comfortable with the progress.''

Saudi Aramco and Exxon Mobil are partners in the SAMREF refinery on the kingdom's west coast, which refines about 350,000 barrels a day of crude oil into gasoline, jet fuel and gasoil, a group of fuels that includes heating oil.

-- Helium (HeliumAvid@yahoo.com), December 19, 1999.

This article may put oil futures limit up in Asia this evening.

-- Trader (internet@action.bubble), December 19, 1999.

Arab Gulf Oil Producers May Not Be Prepared for Millennium Bug, UN Says

Not to worry though. The Czar says:

``It would have been nice if they had started a year or two earlier, but we're optimistic there won't be any interruption in oil flow,'' said John Koskinen, chairman of the U.S. President's Council on Year 2000 Conversion. ``However, our oil inventories are sufficient to handle any eventuality for a few weeks.''

-- Linda (lwmb@psln.com), December 19, 1999.

Polly says...........

no big deal--must be misinformation...cant believe anything these days. Saudia Arabia just wants to raise prices.

idiocy squared!!!

-- d----- (dciinc@aol.com), December 19, 1999.

Doomer says.....

And by the way, all of those countries who said they were ready are LYING......

-- Butt Nugget (catsbutt@umailme.com), December 19, 1999.

Computer says...

It doesn't matter what Doomer or Polly say. The final exam will be graded by computer. There will be no curve.

-- Stars and Stripes (stars_n_stripes@my-deja.com), December 19, 1999.

Glad we bought the bicycles :-)

-- Ashton & Leska in Cascadia (allaha@earthlink.net), December 19, 1999.

This is a definitive article.

-- snooze button (alarmclock_2000@yahoo.com), December 19, 1999.

I wonder what this will do to the Japanese markets tonight?

-- ghost (fading into the@background.com), December 19, 1999.

Geeez guys, come on .... more negative articles/reports than this one have been published before, and still little or no response by the market. Ya really think this is the 'smoking gun'?

We've got a way to go yet before everyone wake up.

-- lou (lanny1@ix.netcom.com), December 19, 1999.

I find it very hard to believe that Mexico and Venezuela will have no oil production Y2K problems. These countries are not exactly the high point of technological reliability. In fact, I do not believe that there will be no significant Y2K problems in Mexico and Venezuela.

-- cody (cody@y2ksurvive.com), December 19, 1999.

I recently overheard a conversation on an airplane. It was a very long flight, and a man and woman next to me hit it off and talked a good deal. At one point, I overheard the woman ask him about his take on Y2K. He proceeded to tell her about the embedded chip problem and how it would take *his company* millions of dollars to replace the chips in the "oil fields." He gave a figure that was so mind boggling I don't remember- I went into a mental gasp when I heard it and my mind did a "does not compute." I realized the key word of the conversation was "would" meaning it hasn't been done yet. !!!!! I'm really hoping he was just trying to impress her.

-- Tiger (justme@my.crappy.pc.com), December 19, 1999.

lou,

Geeez guys, come on .... more negative articles/reports than this one have been published before, and still little or no response by the market. Ya really think this is the 'smoking gun'?

Even if they DID come across a smoking gun they'd just spin it by saying it was the starting gun for the next big market rally.

-TECH32-

-- TECH32 (TECH32@NOMAIL.COM), December 19, 1999.

TOP

If true this will send the USA into a severe recession... minimum

-- Andy (2000EOD@prodigy.net), December 19, 1999.

The Link still works for us. 10:30/a Pacific Time.

-- Ashton & Leska in Cascadia (allaha@earthlink.net), December 21, 1999.