Suppliers fear ‘bug’ law suits

Offshore contractors and suppliers are worried that oil companies may sue them for millions of pounds over computer failures caused by the millennium bug. Iain Bell, chief executive of the Offshore Contractors’ Association (OCA), said service companies would be potentially liable for losses resulting from the malfunction of systems they had supplied or installed. ‘One […]

Offshore contractors and suppliers are worried that oil companies may sue them for millions of pounds over computer failures caused by the millennium bug.

Iain Bell, chief executive of the Offshore Contractors’ Association (OCA), said service companies would be potentially liable for losses resulting from the malfunction of systems they had supplied or installed.

‘One of the biggest problems that contractors have got is in respect of insurance and indemnities,’ said Bell.

There is heightened concern because operators will not have time to check out all their computer systems and will have to concentrate on those that are critical to the safety of operations.

‘It’s very clear that there will be a lot more out there than we will have addressed,’ conceded an IT manager at one of the main North Sea operators. ‘It’s obviously a real concern to them [contractors].’

However, he did not think that in most cases suppliers would be liable.

Nevertheless, some of the large contractors are completely changing their IT systems to ensure Year 2000 compatibility an understandable precaution as many large North Sea contracts now specify that no delays should result from problems associated with the millennium bug.

The OCA recently set up a committee to address the problem. Bell said its main task would be to advise its members particularly those further down the supply chain of the potential problems. ‘It’s the smaller companies we’re worried about,’ he said.

The OCA’s larger members are currently drawing up a detailed list of possible problems and solutions where known based on their experiences to date.

Bell said the plan was to circulate this list to the full membership within a month. He hoped it would alert firms to hazards they might not otherwise consider such as one large contractor’s discovery that different batches of chips within a computer system meant that some PCs from one manufacturer were millennium-proof while others were not.