Deepwater Horizon Oil Disaster Conflict

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Deepwater Horizon Oil Disaster Conflict

Kris Stephens

BUS 5903 Conflict Resolution

Dr. Jacqueline Gilliard

Kstephens1@twu.edu

August 22, 2010

Executive Summary
British Petroleum (BP) is one of the largest oil companies in the world. They have recently been making the headlines for all the wrong reasons after suffering a record breaking oil spill in the Gulf of Mexico. Tony Hayward, former CEO, has been criticized for his handling of the conflict, his remarks regarding the situation, and his lack of efficiency in handling the spill. Newly appointed CEO Robert Dudley faces an uphill battle of spearheading a campaign to clean the region of leaked oil, make amends with people in the gulf and restore BP’s reputation. Dudley must analyze the different key variables involved, consider the people involved and regain their trust as well as implement the right mediators for the conflict.

Background
British Petroleum (BP) is a giant London-Based oil company that branded itself as an environmentally friendly company. That reputation and their financial situation took a hit in the massive oil spill in the Gulf of Mexico caused by an explosion of the Deepwater Horizon, a drilling rig BP was leasing from Transocean. There was a leak in the pipe spanning a mile deep that spewed out some 5 million barrels of oil, as estimated by the government, making it the “largest accidental oil spill in history (Steiner, 2010).”

In just a few months time, BP had already put in $4 billion in response to the oil, under pressure from President Obama, under legal account, to pay for cleanup and damages. Regardless of these responsibility funds, the reputation of the company has been utterly tarnished for the long-term and foreseeable future. There may be restrictions on where BP can drill in the future based on these events as well (Steiner).

After much speculation on the leak, it was finally capped on July 15 after a number of unsuccessful attempts had tested America’s patience. “On Aug. 5th, cement was pumped into the well to seal it (nytimes, 2010).” While the company did implement a relief well to help alleviate the oil leakage, “cutting off the oil at all was a major turnaround for the company, which had been harshly criticized as being unprepared for such as disaster (nytimes).”

BP’s share lost approximately half their value, suspending dividends for this after the Gulf of Mexico leakage and suffered losses somewhere in the region of $100 billion, while faced with the difficult task of trying to restore their good name (nytimes).

Literature Review
BP is a competitive corporation, having to export to numerous countries around the world, and ranking 3rd on a global scale. The company, having been in a competitive position up until the Deepwater Horizon Oil Spill, was unprepared for the disaster. According to Bratkovic (2010): “A competitor will have a high focus on the issue and a low focus on the relationship (Bratkovic).” Bratkovic discusses that the more perspectives that are presented within a conflict, the higher probability for an excellent outcome- or at least the best possible. This correlates to a key variable table and viewing the different steps towards reaching the best solution, the scale, the people involved (respective personalities and relationships), and what is important to both parties. With these key variables considered, and not just looking at the issue at hand, there is a much higher chance of success. Grant (2010) discusses emotional intelligence and the recent attention it has received when dealing with conflict and the appropriate skill set and prior knowledge required to utilize it to your full advantage. Tony Hayward was widely criticized for his “I’d like my life back comment” and he displayed a lack of emotional...
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