ASX Year 2000 Disclosure
ASX YEAR 2000 DISCLOSURE
The following statement is the response of Santos Ltd to the specific questions raised of all listed companies by the Australian Stock Exchange Ltd.
1. Has your company’s assessment of its overall potential exposure to the Year 2000 problem changed materially from what the market has previously been told? If it has, your response should describe the change.
2. Has your company initiated any material action to address the Year 2000 problem beyond actions previously disclosed to the market, or does it propose to initiate any such action? If it has, your response should describe the action.
3. Please provide details of your company’s progress in relation to its activities to address the Year 2000 problem, including the date by which your company expects to have completed those activities.
The present position is as follows:
Critical IT Systems
– Commercial Applications
Santos key commercial applications (financial, human resources and maintenance management systems) were replaced in 1998 by modern applications, providing the Company with increased functionality as well as Year 2000 compliant applications and hardware.
– Technical Applications
Technical applications developed by the Company either have been fully tested and found to be compliant or have been replaced with Year 2000 compliant applications.
Santos also has a variety of packaged software applications and operating systems in its commercial and technical environments, which have been upgraded to compliant versions.
In addition, Santos currently has five non-compliant production reporting systems which are scheduled to be replaced by year end 1999 with compliant applications providing improved facilities. The Company has jointly developed these new applications with an external party using software which is warranted by the software vendor as being, and has been tested to be, Year 2000 compliant. The new applications are scheduled to be implemented by the end of the fourth quarter 1999. Progress is being closely monitored and a contingency plan has been developed and will be activated should the implementation fall behind schedule and put the 31 December 1999 deadline at risk.
Critical Non-IT Systems
Santos has completed investigation and testing work at Santos operated major field locations in South Australia, Queensland and the Northern Territory. Based on this work, there are no known major Year 2000 compliance problems at those locations.
Santos is dependent upon a number of third parties having Year 2000 compliant systems, including suppliers, contractors, pipeline operators, major customers and operators of joint ventures in which the Company holds an interest. Santos continues to closely monitor progress with identified key third parties.
The Company also continues to participate in oil and gas industry forums to promote awareness and to share industry knowledge of Year 2000 issues.
4. Are there areas of your company’s activities where, in your company’s assessment, material Year 2000 risks will remain after the company’s activities to address the Year 2000 problem are completed? Examples might include dependencies on third parties such as utilities. If there will be remaining risks, your response should describe them.
Santos main areas of potential risk are assessed to be third party service providers, including pipeline operators and customers.
Santos recognises that it will not be able to guarantee the Year 2000 compliance of any third party. However, as described above, Santos has taken steps intended to minimise such risks through monitoring progress with third parties with whom there exists a key business relationship.
It is relevant to note that Santos is not dependent upon external utilities for electricity or water at its major Cooper Basin gas production and processing facilities as it generates its own electricity and produces its own water supply. The Company also has its own telecommunications networks within the Cooper basin.
5. Please describe your company’s contingency plan in relation to Year 2000 issues.
Santos has in place contingency plans for equipment failure at its major gas production facilities and for its major computing facilities. These plans have been revised with a view to ensuring their appropriateness to Year 2000 issues.
As part of its Year 2000 program Santos has reviewed other areas of its business including city based office facilities and has created additional Year 2000 contingency plans where considered necessary on the basis of a business risk analysis.
The overall objective of Santos Year 2000 program has been to minimise the potential for a material disruption to the Companys business as a result of Year 2000 problems. However, an assurance that Year 2000 problems will not affect Santos business cannot be given.
This statement is a Year 2000 disclosure statement for the purposes of the Year 2000 Information Disclosure Act, 1999. A person may be protected by that Act from liability for this statement in certain circumstances.