Venezuelan Oil Follows the Sun for Y2K Tips

Updated 6:06 PM ET December 1, 1999

\ By Tom Ashby

CARACAS (Reuters) - Venezuelan state oil company Petroleos de Venezuela S.A. (PDVSA) plans to take advantage of a 17-hour time lag after the millennium first dawns in New Zealand to fine-tune its own Y2K contingency plans.

"We play an active role in the so-called follow-the-sun initiative through which we will have information online as the year begins in the first important land mass which is New Zealand," Ivan Crespo, PDVSA's executive in charge of its Y2K program, told Reuters in an interview.

"That should give us about 17 hours to take action if anything happens in installations similar to ours," he added.

With $180 million spent over five years in remedying PDVSA's computer-controlled systems, the company's attention was now focusing on contingency plans with 30 days to go.

"If we work on the most likely scenario, my personal opinion ... is that if any events do occur, they will be isolated and on a small scale and there will be pre-arranged solutions to restore the service in a short time," he added.

The world's No.3 oil exporter, PDVSA pumps 2.7 million barrels of oil daily, operates 12 large refineries in Venezuela, the Caribbean and the United States and owns 24 tankers.

PDVSA's preparations have included checking and remediating 25 million lines of computer code and about 14,000 computer systems. Y2K threatens to confuse some computers that misinterpret the date change as a malfunction, potentially paralyzing crucial operations.

"Even in the case of a system failure which for another company would be extraordinarily critical, such as a medium-sized refinery, in our case it could be considered a local and isolated event because this is not a company with just one refinery," Crespo said.

But the company's efforts have not been limited to its own vulnerability.

If other major oil producers encounter problems, Venezuela, Saudi Arabia and Mexico said this week they would act jointly to make up for lost supply around the New Year.

PDVSA CONFIDENT IN ELECTRICITY SUPPLY

Other key external risks for PDVSA include the government, clients, banks and power companies, Crespo said.

Much of the concern in Venezuela has concentrated on the state-dominated electrical sector, which is starved of investment and already suffers regular regional black-outs.

Crespo said PDVSA depends on third parties for about 60-70 percent of its power needs, with the heaviest dependence in the eastern and southern oilfields.

However, the giant Paraguana refining complex, with a total 940,000 barrels per day of capacity, is almost totally self-sufficient, he said.

A major electrical failure would deal a critical blow to the oil industry, because little works without it. But Crespo has held fortnightly meetings with power companies for over a year and says he is very confident of continuous supply.

The sector has drawn up contingency plans so that even with a serious computer failure, supply could be maintained using manual switches and spare generators on stand-by, Crespo said.

As a preventive measure, PDVSA will suspend all Venezuelan oil loadings and tanker moorings for about 10 hours around midnight on December 31.

At worst, the company expects this to incur a minor demurrage charge from ship owners for the delay.

Inventories are generally being raised ahead of the date change, Crespo said, although in some cases they have to be drawn down to make space for production if freight fails.

In production and refining, preventive or contingency plans sometimes involve falling back onto mechanical monitoring systems and taking advanced systems off-line for a few hours.

In other cases, Crespo said the company will to fool its machines into continuing normally. For example, some units can be set to pass the 11:59 p.m./midnight moment at different times to avoid the risk of multiple, simultaneous faults.

======================================= End

Ray

-- Ray (ray@totacc.com), December 01, 1999

Answers

I say toss the Venezuelans those signs to hang around their necks!

You know, one of those, "I AM DUMB" signs.

-- the Virginian (1@1.com), December 01, 1999.

Hey techies! How about an assessment on the last two paragraphs of this article. I know you can't do this on embeddeds, but is there any oil industry process where changing the clock would work??? I think I already know the answer but I'd sure appreciate some discussion...

-- Downstreamer (downstream@bigfoot.com), December 01, 1999.

This Crespo is the executive in charge of their y2k remediation and he's making statements like this!!! What does that tell ya?

-- Downstreamer (downstream@bigfoot.com), December 01, 1999.

I say, why would you even try to "FOOL" machines if they have been remediated, tested, and known to be Ready.

Do they think we are Fools?

-- Tommy Rogers (Been there@Just a Thought.com), December 01, 1999.

As a REALLY big OPEC producing company what better excuse to have for an interruption in the flow of oil (Y2K). They could make more money with a few well placed bets in the various markets AND KEEP there oil in the ground. Even if nothing breaks I bet prices go up $.25 - $.50 per gallon after rollover anyway.

-- Guy Daley (guydaley@bwn.net), December 01, 1999.

Today was a weird day for certain. Market melted on the open following Brent. This was on the back of a rather spurious Saudi story that they wanted a ceiling of 25 bucks on WTI. This promptly moved TI down with brent by 40-50 cts. Then we began to see some pullback on the downward move, followed by some more selling. Then out of nowhere the market shot up like a Patriot missle. This was either Sadamm and the Saudi's getting long once again, or some heavy fund movements. Who knows. This market is whacked, diffs are strong while futures are very volatile. Strange days indeed.

What they really meant to say.....for ed purposes only:

Venezuelan Oil Follows the Sun for Y2K Tips Updated 6:06 PM ET December 1, 1999

\ By Tom Ashby

CARACAS (Reuters) - Venezuelan state oil company Petroleos de Venezuela S.A. (PDVSA) plans to take advantage of a 17-hour time lag after the millennium first dawns in New Zealand to fine-tune its own Y2K contingency plans. (One of the Vens broke out a calculator today and figured out that they have seventeen hours until TSHTF in Caracas).

"We play an active role in the so-called follow-the-sun initiative through which we will have information online as the year begins in the first important land mass which is New Zealand," Ivan Crespo, PDVSA's executive in charge of its Y2K program, told Reuters in an interview. (We will be playing the role of observer, watching to see just how badly we're going to be screwed, it's an important role really.)

"That should give us about 17 hours to take action if anything happens in installations similar to ours," he added. (If stuff happens during that time, you can bet that I'll be on a jet with some buddies from PDVSA heading for a safer location than my current one.)

With $180 million spent over five years in remedying PDVSA's computer- controlled systems, the company's attention was now focusing on contingency plans with 30 days to go. (It's certainly funny how time flies when you're issuing silly meaningless headlines. Why I remember one back in Mar 99 or so that said we were really freaked out because the former admin left Hugo Chavez holding the bag. They spent that 180 mil on villas in Switzerland and some good Columbian powder.)

"If we work on the most likely scenario, my personal opinion ... is that if any events do occur, they will be isolated and on a small scale and there will be pre-arranged solutions to restore the service in a short time," he added. (If we work on any other scenarios, we're badly screwed here.)

The world's No.3 oil exporter, PDVSA pumps 2.7 million barrels of oil daily, operates 12 large refineries in Venezuela, the Caribbean and the United States and owns 24 tankers.

PDVSA's preparations have included checking and remediating 25 million lines of computer code and about 14,000 computer systems. Y2K threatens to confuse some computers that misinterpret the date change as a malfunction, potentially paralyzing crucial operations. (as if you didn't already know that, we only recently figured it out ourselves)

"Even in the case of a system failure which for another company would be extraordinarily critical, such as a medium-sized refinery, in our case it could be considered a local and isolated event because this is not a company with just one refinery," Crespo said. (we'll probably have some big fireworks at the refinery)

But the company's efforts have not been limited to its own vulnerability. (if our production goes down, you can bet those Saudi bastards will line up to f*#$% us, just like every other producer on the planet)

If other major oil producers encounter problems, Venezuela, Saudi Arabia and Mexico said this week they would act jointly to make up for lost supply around the New Year.

PDVSA CONFIDENT IN ELECTRICITY SUPPLY

Other key external risks for PDVSA include the government, clients, banks and power companies, Crespo said.

Much of the concern in Venezuela has concentrated on the state- dominated electrical sector, which is starved of investment and already suffers regular regional black-outs. (Since we're dependent on them and they have so little money, that they have blackouts now, we figure it's a safe bet we'll be in the dark Jan 1)

Crespo said PDVSA depends on third parties for about 60-70 percent of its power needs, with the heaviest dependence in the eastern and southern oilfields. (So we figure we'll be down by quite a few barrels come Jan 1, but don't worry cause the Saudi's will sell you some oil, probably at a great price too. You know those guys, always willing to cut you a good price.)

However, the giant Paraguana refining complex, with a total 940,000 barrels per day of capacity, is almost totally self-sufficient, he said. (It will be the only thing in the country still running if we don't blow it up first)

A major electrical failure would deal a critical blow to the oil industry, because little works without it. But Crespo has held fortnightly meetings with power companies for over a year and says he is very confident of continuous supply. (Meetings, meetings, meetings. I have been going to these freaking meetings every fortnight for godsake, I'm tired of this crap....always the same shit, "we're working on it, we're almost done, blah blah)

The sector has drawn up contingency plans so that even with a serious computer failure, supply could be maintained using manual switches and spare generators on stand-by, Crespo said. (We figure we could run it on generators from Home Depot maybe?)

As a preventive measure, PDVSA will suspend all Venezuelan oil loadings and tanker moorings for about 10 hours around midnight on December 31. (sure would hate to blow up a tanker ya know?)

At worst, the company expects this to incur a minor demurrage charge from ship owners for the delay. (now, if the shit isn't flowing and the lights are out they'll get about 17 hours of sunshine watching demmurrage before we declare force majeure.)

Inventories are generally being raised ahead of the date change, Crespo said, although in some cases they have to be drawn down to make space for production if freight fails. (It's being drawn and built at the same time. Sorta like spinning our wheels in an organized manner. Net, Net we'll be the same. We're not, we're not ahhh.... Smart! We're not smart.)

In production and refining, preventive or contingency plans sometimes involve falling back onto mechanical monitoring systems and taking advanced systems off-line for a few hours. (This will cost us many millions of dollars but it's better than launching them to the moon afterall)

In other cases, Crespo said the company will to fool its machines into continuing normally. For example, some units can be set to pass the 11:59 p.m./midnight moment at different times to avoid the risk of multiple, simultaneous faults. (If that doesn't work, we plan to put on some old wristwatches which have stopped many years ago. It is believed that this may cure the Y2K bug permanently, if we can just click our heels three times while looking at our stopped watches....)

======================================= End

Ray

-- Gordon (g_gecko_69@hotmail.com), December 01, 1999.

Let's see...that's an hour to figure out what to do, 15 hours to remediate, and a full hour for testing, right?

-- Mad Monk (madmonk@hawaiian.net), December 02, 1999.

Monk: I believe the "optimistic" interpretation would be: 3600 seconds to figure out what to do, 54,000 seconds to remediate, and 3600 seconds to test.

Sounds better, doesn't it?

"For tomorrow may rain so / I'll follow the sun"

-- Steve (hartsman@ticon.net), December 02, 1999.

Could someone please tell me that the idiots in charge are smarter than this?

Okay, then can you tell me that it won't matter that they're stupid?

Awright, well can you tell me where I can find gasoline after rollover?

-- nothere nothere (notherethere@hotmail.com), December 02, 1999.