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BP—Deepwater Horizon Case Study INT1001 Study Skills Module Reading and Writing Skills—Summative Assignment Done by: Mew Hui Ying
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Date: 12 February 2013
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Industry: Oil and Gas
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Company: British Petrol
Contents Page No.
1. Introduction………………………………………………….…….3
2. The Case:
2.1 The Deepwater Horizon Explosion……………………..4
2.2 Key Stakeholders and their Involvement……………....5
2.2.1 Shareholders……………………………………..5
2.2.2 Government……………………………………....5
2.2.3 Fishermen,
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The government was also responsible for activating coast guards and the military in its response to the spill. Hence, the role of the US government here is crucial as a “parent” to ensure that BP acts in the welfare of its citizens.
2.2.3 Fishermen, Activists and Environmentalists
With the huge impact of the oil spill on marine life and coastal regions, fishing and tourism industries of the places affected in the Gulf Coast severely declined. In the fishing industry, the incident led to an approximate $2.5 billion loss, while tourist industries experienced a loss of a predicted $23 billion (Jarvis, 2010). In addition, the moratorium placed on deep water drilling left 58,000 workers unemployed (ibid).
In its Annual General Meeting in 2011, BP faced protests against BP’s executive’s remunerations and voiced their injustice (Webb & McVeigh, 2011). Facebook pages such as “Boycott BP” and RIP Spongebob, who died in an oil spill cause of BP” have been set up by activists, and have garnered 847,730 and 468,157 likes respectively (Jarvis, 2010). Hence, the impacts on these stakeholders have varying degrees, but are nonetheless affected one way or another by BP’s mistake.
2.3 Ethics and Values
According to BP’s Code of Conduct, BP ”commits to “excellence and to the disciplined management of our operations” (BP, 2013a). In this
This paper includes information regarding the BP Oil spill. References are listed at the bottom.
who will ultimately be held responsible and will they adequately compensate the families of the victims, BP who leased the rig, Transocean who owned the rig, Hyundai Heavy Industries who built the rig or MMS who conducted the inspections on the rig.
What responsibility did the executives of BP have in making more socially responsible and safety conscious decisions at the expense of not meeting the consumer demand of cheap gas and thus lowering the returns for shareholders and their own compensation?
On April 20, 2010 off the Gulf of Mexico, there was a blowout of the Macondo well which is owned by British Petroleum also known as BP. When the blowout took place it got immediate media attention because aspects of the event were known over the world. Within events transpiring it was discovered how limited the resources and reaction to the disaster was going to be. This paper will detail aspects of the event from symptoms of the problem, the root cause, important unresolved issues, roles of the organization’s key players and stakeholders, and explain the focus of specific ethical systems. Also discussed in this paper are relevant strategies and alternatives, the effect of globalization
When we look at the effect of the deepwater oil spill on other stakeholders, we see that they were impacted more negatively. There were 11 people killed and 17 were injured. Although the number of people in this group is small, losses of life and health weigh heavily on the scale as we assess the consequences of BP’s decision to forego the back-up switch.
A company with such extensive operations in developing countries also needs to carefully manage its approach to human rights, and ethical business practices. BP will have significant impact on local communities - both as a huge
The effect of oil spill is usually calculated in terms of damage on the environment, aftermath on marine species, and effect on the tourism and fishery industries. The impact on human health is less known relatively. The financial costs associated with oil spills are also a factor. Arguably, it is a less serious consequence of an Oil Spill, however the financial costs have the potential to bankrupt an organization. BP suffered major financial loss as a result of the Oil Spill in the Gulf of Mexico. They have paid up to $1.5 billion in an effort to settle various claims and compensation. (BP, n.d)
The Deepwater Horizon Oil Spill occurred on April 20, 2010 in the Gulf of Mexico. This oil spill was the largest spill in history in front of the Exxon Valdez oil spill of 1989. This oil spill released about 4.9 million barrels of oil into the ocean. This spill not only wreck havoc on the marine life but also the economic players that depended on ocean such as fisherman, tourism, and offshore drilling located along the gulf coast. Along will the spill the oil rig which was named Deepwater Horizon also went up in flames. This proved that the issue went far beyond just an oil rig that blew a line. Since this oil spill had drastic impacts all along the coast, BP which was the most liable for this incident faced criminal charges based on what happened. BP which knew the risks of deep ocean drilling failed to take the necessary safety procedures to reduce the risks of such incident occurring, thus was the reasoning behind placing most of the fault on them and not the other companies. The lack of regulatory oversight led to the issues and cost-cutting procedures opened the rig up to possible malfunctions like the one that occurred. During the spill into the gulf, BP sealed the well with cement which seemed to stop a majority of the oil from escaping the well. BP also recognized that the well was “dead” which was proven wrong when scientists still could conclude was leaking minor amounts of oil into the ocean. This spill not only proved to be harmful to the environment but also
These social responsibilities and many other ethical issues were realized by many people when on April 20, 2010 British Petroleum had a major oil spill in the Gulf of Mexico. Also, known as the Deepwater Horizon Oil Spill, the BP Oil Disaster, the Gulf of Mexico Oil Spill, or the Macondo Blowout. BP was mostly at fault, but Transocean, the rig operator, and Halliburton, the contractor,
The BP Oil Spill An Introductory Background - One of the most controversial ecological disasters in recent history focused on multinational British Petroleum and their Gulf of Mexico Operations. The Deepwater Oil Disaster began on April 20, 2010 with an explosion on the Deepwater Horizon Oil platform, killing 11, injuring 17. It was not until July 15th, however, that the leak was stopped by capping the wellhead, after releasing almost 5 million barrels (206 million gallons) of crude oil, or 53,000 barrels per day into the Gulf of Mexico. It was not until September 19th that the relief well process was complete and the U.S. Government, EPA, and Coast Guard agencies declared the well breach effectively stopped (Cavnar, 2010).
BP has had a long history of ethical and legal violations because BP chose to put profits above all else. In the past twenty years, BP subsidiaries were convicted of environmental crimes in Texas and Alaska. In addition, BP received the biggest fine in US history regarding safety violations. Although BP accepted responsibility, their record showed questionable and illegal behavior for twenty years. One of BP's major issues happened in a Texas refinery close to Galveston in 2005 (Jennings, 2009). This explosion took the lives of fifteen workers and injured five hundred people and caused residents nearby to become sheltered in their homes (Jennings, 2009). The US Chemical Safety and Hazard Investigation board concluded that BP had
On April 20, the explosion on the Deepwater Horizon drilling rig in the Gulf of Mexico led to the largest accidental release of oil into marine waters in history. As a result, a huge loss of money and life was caused and affected serious environmental damage to wild animals and water pollution. BP was accused of their irresponsibility that it took 87 days before the well was closed and sealed. BP’s shares
Deepwater Horizon oil Spill: BP’s drilling platform in the Gulf of Mexico had an explosion in April 2010, causing the “largest oil spill catastrophe in the petroleum industry history”. It caused the death of 11 men and injury to several others. “More than 150,000 barrels of crude oil gushed into the sea, every day, for almost 5 months and up to 68,000 square miles of the Gulf 's surface were covered” (1).
The sudden closure was a strike to the living of fishermen. The record showed that the closures resulted in a total loss of approximately $247 million to the fishing industry (NRDC, 2015). In order to fulfill the basic needs and income for the fishermen, both the government and BP company made some actions. The local government asked the residents and fishermen to do the clean-up jobs for the spill, because they knew the geographic locations along the shoreline much better than other out-of-state workers (Graham et al., 140). The BP company also offered help and started the “Vessels of Opportunity program” that payed the private vessels for “skimming, booming and transporting supplies”. However, BP’s program did not work much for their targeting
BP tends to make bets that others don’t which is most likely why the disastrous deep water horizon oil spill occurred in the Gulf of Mexico five years ago. The fire burned for 36 hours while hydrocarbons leaked into the gulf before the well was sealed, unfortunately eleven individuals died. It has been difficult for BP to be the best company right now since this falling and they have been in reparation mode since this catastrophe. However, BP is now incorporating high safety and showed everyone that they are very reliable on the recovery of this hardship of BP trying to mix oil with water. BP came together to control the situation, cleanup, and diminish as much contamination as possible into the gulf. In addition, they are devoted long term to improve the Gulf of Mexico’s bionetwork and promise to be more careful so this will not happen again.