§ Mr. EnnisTo ask the Secretary of State for Trade and Industry what progress is being made by UK offshore oil and gas producers and oil companies to deal with the millennium bug; and what measures have been taken by his Department to ensure the security of concessionary coal supplies over this period. [81700]
§ Mr. WillsI can now report the findings of the independent assessment process established by the DTI which confirms that UK oil companies and offshore gas producers are on track to ensure that there will be no major disruption to supplies due to the Year 2000 threat to computer systems. The DTI has taken on the role of "responsible body" reporting to the ACTION 2000 National Infrastructure Forum on the Year 2000 preparations being made by the oil industry and UK's offshore oil and gas producers.
The DTI has approached this task in a systematic way, making full use of the industry's own resources. It has engaged W. S. Atkins Consultants Limited—an internationally known and highly respected engineering consultancy with extensive experience within the oil and gas industry—to independently validate the process adopted and its results. The industry has fully supported this important work and provided full and frank access to all the relevant information and staff.
554WThe independent verification approach adopted by DTI has been agreed with ACTION 2000 and designed to build on the work already in hand by offshore and onshore companies to avoid duplication of effort. It has been closely supported by the relevant trade associations (UKOOA—UK Offshore Oil Operators Association, UKPIA—UK Petroleum Industry Association and AUKOI—Association of UK Oil Independents).
For the offshore sector, DTI arranged for companies to conduct a stringent assessment process supported by UKOOA, which involved preparation of a report on each operator's state of readiness and its independent confirmation by, either a "peer group assessor" or an external consultant.
To further enhance the independent element in this process, W. S. Atkins carried out a programme of visits to review the process adopted, the supporting data and its conclusions. The format and extent of the visit programme was determined by W. S. Atkins. It covered all the key elements of the offshore oil and gas industry including production and onshore terminal/pipeline facilities, and was designed to ensure they could reach a fair view on the overall status of the upstream industry.
For the downstream oil sector covering the supply and distribution of refined oil products, W. S. Atkins were engaged to carry out a more intensive role. They prepared and issued on behalf of DTI a detailed and closely targeted questionnaire to all the main downstream players. Following a detailed analysis of the responses W. S. Atkins conducted a series of detailed on-site follow-up visits designed to validate the questionnaire responses. Officials from DTI and other interested Government Departments also participated in some of the visits.
Again the visit programme was determined by W. S. Atkins and designed to ensure that they were able to form a fair view of the overall status of the downstream industry. The programme was carefully planned to cover all aspects of the industry. It looked vertically through the supply chain and covered refining, pipelines, distribution terminals, and retail outlets. It embraced all sectors of the industry from the majors, and hypermarkets through midsize players to smaller retailers. It extended throughout the UK covering locations in England, Wales, Scotland and Northern Ireland.
Throughout the process, DTI has worked closely with Action 2000, other responsible bodies and the various trade bodies to ensure nothing was overlooked and ensure that the process adopted reflected good Year 2000 practice.
At the National Infrastructure Forum meeting in January 1999, the industry attracted an overall "amber" assessment against the standard colour code adopted by ACTION 2000. I am pleased to report that W. S. Atkins have confirmed that the industry has since then made substantial progress both onshore and offshore. Copies of their summary reports have been placed in the Libraries of the House, and copies made available on the DTI internet site. W. S. Atkins have also confirmed that the validation process adopted by DTI provides an effective means of independently validating the industry's state of 555W progress, both in terms of its suitability to the offshore/ onshore sector, and general good practice in relation to Year 2000 risk assessment.
In detail W. S. Atkins found that more than half of the offshore operators and almost two thirds of the downstream industry now merit a blue assessment (no identified risks of material disruption), and that the remainder were on track to attain that rating once work scheduled during the normal summer shutdown period has been completed, and residual contingency planning and external dependency issues had been finalised.
The DTI has agreed a follow up plan with W. S. Atkins, to monitor progress on the outstanding issues and carry out a further programme of independent check visits to confirm that the scheduled work has been completed successfully. DTI will report on this work at the National Infrastructure Forum meeting in October 1999, and will continue to monitor the industry's progress throughout the millennium period.
Regarding coal, the Department is responsible for supplying concessionary fuel to some 90,000 former employees of British Coal. This accounts for 20–25 per cent. of all solid fuel for domestic use. Currently, two large coal companies are under contract to DTI for the supply and distribution of concessionary fuel (CPL Distribution Ltd. and T. H. Fergusson).
The Department appointed Aon Risk Services Ltd. (risk management consultants) to assess the security of supply of concessionary fuel over the millennium period. This covered the fuel distributors as well as a number of major producers. In addition, Aon was asked to advise on the position in the wider retail market for household coal in so far that the same systems are used by the companies under contract to DTI for distributing concessionary supplies. Aon' s conclusions are very encouraging with all the main operators achieving blue rating. The remaining 5 per cent. merit amber rating but are on course to achieve blue rating by October. Aon will be involved in continued monitoring of the position.