Main events contributing to the Oil Spill2
Who was responsible for the incident?2
Who was impacted by the incident?2
Individuals and Communities2
What claims have been placed on the company?2
How are these claims being dealt with by the company?2
Strategic Implications and Social Responsibility2
This report reviews one of the most infamous industrial disasters that has ever occurred – the Deepwater Horizon oil spill. This was a disaster that not only caused serious damage to the operating facilities of the company concerned (British Petroleum – BP), but one that also caused massive environmental damage, widespread damage to people’s livelihoods and tragically also the loss of human life. Inevitably, an incident with such broad impacts means that the organisation responsible (BP) has had to face up to massive direct costs. not only to rectify the damage done but also to compensate those affected for past and future losses. But it does not end there. In addition, the damage done to the company’s reputation has extensive negative repercussions for its future business strategies.
To gain a complete understanding of British Petroleum (BP) and the incident that sparked worldwide concern and upheaval, one must first acknowledge the general operations of BP and how the brand views itself. They state: ‘BP is one of the world's leading international oil and gas companies, providing its customers with fuel for transportation, energy for heat and light, retail services and petrochemicals products for everyday items’ (BP, 2011) From its humble beginnings in England 1908, BP has expanded into 30 countries, employing over 83,000 people with a 2011 Sales and Other Operating Revenue of $375,517 million. With a particular emphasis on social responsibility and business citizenship in this report, addressing BP’s set of values is essential. Five values express what BP as an organisation has built their company on and how they strive to operate on a day-to-day basis. These values are a benchmark for business activity; i) Safety
v) One Team
Main events contributing to the Oil Spill
A built up gas release resulted in an explosion on the Deepwater Horizon, Macondo Well, in the Gulf of Mexico on the evening of April 20, 2010. Subsequently, 11 people lost their lives and 17 others were injured. The oil rig burnt for 36 hours until it sunk and hydrocarbons continued to leak into the Gulf of Mexico for 87 days. BP claims that the incident was the result of a series of failures that caused unforeseen contingencies that contributed to the disaster. Publicly, BP stated ‘The accident involved a well integrity failure, followed by a loss of hydrostatic control of the well. This was followed by a failure to control the flow from the well with the blowout preventer (BOP) equipment, which allowed the release and subsequent ignition of hydrocarbons. Ultimately, the BOP emergency functions failed to seal the well after the initial explosions.’ (BP, 2010) A breakdown of the incident can be understood in terms of the eight definitive occurrences described below. These findings emerged from an investigation team assembled by BP. Well Integrity was not established
1. The annulus cement barrier did not isolate the hydrocarbons. 2. The shoe track barriers did not isolate the hydrocarbons. Hydrocarbons entered the well undetected and well control was lost 3. The negative-pressure test was accepted although well integrity had not been established. a. Whilst carrying out the negative pressure test, the BP team leader realises that the rig crew are using a process for negative testing that is not the BP preferred method. 4. Influx was not recognized until hydrocarbons were in the riser. 5. Well...