I found that on some workstations at client side “Distributed Transaction Coordinator” service was not running and could not be started. This service on the client machine is a prerequisite for one of our application that is using Oracle as a back-end.
Search on Google returned plenty of similar cases, but none of the recommended workarounds helped. Until I found the document that explains the procedure on how to reinstall the service.

Refer to:
MS KB Article 891801 “How to reinstall Microsoft Distributed Transaction Coordinator on a computer that is running Windows XP”.

Since DTC was not in use by any other service or application I picked a shorter path:

1) %WINDIR%\System32\msdtc.exe -uninstall

2) delete keys listed in KB 891801:

HKEY_CLASSES_ROOT\CIM
HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Services\MSDTC
HKEY_LOCAL_MACHINE\SYSTEM\ControlSet001\Services\MSDTC
HKEY_LOCAL_MACHINE\SYSTEM\ControlSet002\Services\MSDTC
HKEY_LOCAL_MACHINE\Software\Microsoft\MSDTC

3) run %WINDIR%\System32\msdtc.exe -install

4) add registry key HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\MSDTC\XADLL

5) at command line run 

regsvr32 mtxoci.dll.

You will receive a message that states that DllRegisterServer in Mtxoci.dll succeeded