British Petroleum

Topics: BP, Tony Hayward, Petroleum Pages: 11 (4683 words) Published: February 25, 2011
ESC Rennes School of Business


Master of Science in International Finance
Corporate Governance
Tess Taubler
November 22, 2010

Over the time, we had seen a lot of enterprises growing, disappearing, changing and managing different situations and the way that they can handle any problem could be result in a successful history, they can learn about it or otherwise could be a problem and bring the end of the firm. There is a lot of factors that affect the way that one firm can solve their crisis in a good or in a bad way, but the main question is what happen when the issue is related with one of the most controversial and needed products around the world, the oil, a non-renewable energy that according to Richard Adams (1991, Changing Corporate Values) the price of oil reflects its scarcity: the more people want, the more people pay. This situation become more complicated for an enterprise which operations are focuses in oil and gas production and exploration and is one of the biggest in the world, British Petroleum. On April 20, 2010 British Petroleum (BP) suffered one of the major and worst accident that a company can faced because involved and affected all it related parts: investors and its obligations with stakeholders, enterprise, authority, customers, environment, board of directors and even the economy of one country. On April 20, 2010 following the timeline of BBC news (September 2010, Timeline: BP oil spill) there was an explosion and fire on the BP Transocean drilling rig Deepwater Horizon in the Gulf of México, killing 11 workers and causing an oil spill that became the worst environmental disaster in US history. The consequences of this disaster are multiples, Julie Gerstein (June 2010, The Gulf of Mexico oil spill in numbers) from Daily Green shows us the different losses around this unfortunately accident, 5 thousand barrels a day gushing and almost 127 thousand barrels in total amount, in profit losses that BP have to afford is 1.5 billion dollars in amount in insurance, 62 million dollars amount paid in claims for residents, 1.6 billion dollars the cost of the oil and between 5 to 42 million dollars range of BP´s estimated fines per day. In the other hand were 12 thousand Louisiana residents that had unemployment since the spill, 400 numbers of wildlife species and at least 30 species of birds threatened by the spill.

Could be avoided?
As we can see this was the worst oil accident in United States of America history, but it is a tragedy for the entire world and that could be avoided in different ways, negligence was involved with a bad leadership that he couldn’t manage the situation in a better way, lies and controversies that damaged the situation, but at the end could be the beginning of a new enterprise who can be more involved with the society and supporting more ecological activities. First of all I´m going to talk about the excessive confidence that BP had about its operations. I consider that a good and organized company should it take in consideration all positive and negative factors that could affect it, and developed contingency strategies for any problem that it could faced in the future. They should perform a good and effective Business contingency plan, that according to Larry Herriot (1997, Business Contingency Planning is…) is a business function which when properly employed places revenue loss and cash flow exposures under management control during any business interruption. Business Contingency Planning can also assist management in providing customer confidence and service satisfaction, as crisis management control can assist the corporation in maintaining market share, and can provide the basis to promote industry image. Taking in consideration this, if BP has had a god business contingency plan, they would have solved better the problem, the...
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