§ Ms LawrenceTo ask the Secretary of State for Trade and Industry what progress has been made by UK offshore oil and gas producers and oil companies in dealing with the millennium bug; and what measures have been taken by his Department to ensure the security of concessionary coal supplies over this period. [95427]
§ Ms HewittI can now report the findings of the independent assessment process established by the DTI which confirms that UK oil and gas producers and oil suppliers have now attained a 100 per cent. Blue status against the Action 2000 assessment criteria and are now assessed as ready to ensure that it will be business as usual and that there should be no major disruption to supplies due to the Year 2000 threat to computer systems. The DTI has been pleased to take 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 and thorough way, making full use of the industry's own resources. It has engaged WS Atkins Consultants Ltd.—an internationally known and highly respected engineering consultancy with extensive experience within the oil and gas industry—to validate independently 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.
611WThe 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—offshore oil operators association, UKPIAUK 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 enhance further the independent element in this process, WS 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 WS 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, WS 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 WS 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 WS 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 mid-size 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 WS Atkins have confirmed that the industry has since then made substantial progress both onshore and offshore, and has now attained 100 per cent. "blue" status. A copy of their summary reports has been placed in the Libraries of the House, and copies made available on the DTI internet site. WS Atkins have also confirmed that the validation process adopted by DTI provides an effective means of independently validating the industry's state of progress, 612W both in terms of its suitability to the offshore/onshore sector, and general good practice in relation to year 2000 risk assessment.
In detail WS Atkins have awarded 100 per cent. "blue" status in respect of the upstream sector which covers firms engaged in the production and transport to shore of oil and gas, and related gas interconnectors. 100 per cent. "blue" status was also attained by those companies assessed in the downstream oil sector. The assessed companies are responsible for over 90 per cent. Of UK oil supplies and cover the receipt, refining, distribution and retail of oil products.
The DTI has agreed a follow up plan with WS Atkins, to continue to monitor progress and carry out a further independent check visits to monitor the industry's ongoing readiness 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 equally encouraging with all the main operators now assessed as achieving 100 per cent. blue rating. Aon will be involved in continued monitoring of the position.