British Petroleum and the Deepwater Horizon Oil Spill

Table of Contents

1 Introduction..............................................................................02

1.1 Assignment objectives.........................................................02

1.2 Context of the assignment....................................................02

1.3 Methodology..................................................................02

2 Introduction to British Petroleum......... ........ ........ ............... .......03

3 Reasons for the Oil Spill.................................................. ......04

4 Impact of the disaster to the ecology and livelihood.......................... 06

4.1 Damage to the Ecology..........................................................06

4.2 Damage to the livelihood of the people....................................... 08

5 Ethics and Social Responsibility........................................ .......10

6 Corrective action to avoid recurrence...........................................14

7 Recommendations................................................................16

8 Conclusion............................................................................18

9 References........................................................................19

10 Bibliography.......................................................................21

11 Appendix......................................................................... .22

1. Introduction

1.1 Assignment Objectives

o Understanding the reasons for the oil spill

o Evaluating the impact to the ecology and livelihood of the people

o Assessing the prevalent ethics and social responsibility within the organization

o Analysing the corrective action taken and the avoidance of a recurrence

o Recommendations to operate as a ethical and socially responsible fortune 500 company

1.2 Context of the assignment

The essence of this report includes a detailing of the BP oil spill which took place in recent times. The impact of this event was immense to the environment and the livelihood of people. The contents herein highlight the reasons for the spill and explain the extent of damage that it caused to ecology and people. The concept of ethics and social responsibility has been scrutinized in relation to the occurrence of this event. Furthermore corrective measures to avoid the recurrence of this have been recommended.

1.3 Methodology

The data has been collected through web sites, published journals, business reports, corporate sites. statistical databases and other documents available on the internet. Finally gathered data were analyzed using both quantitative and qualitative methods.

2. Introduction to British Petroleum

Multinational Corporations emulate the formation of operating in more than one country by setting up their management headquarters in the home country and operating in several other host countries. Driven by the maximization of profits they synergize the penetration of different markets to gain market share, take advantage of resources, technological expertise and operate competitively. While operating in different countries they contribute towards the development of local and world economies and play a vital role in international relations and globalization and become responsible and accountable towards all stakeholders who are affected by their actions in the way they operate. While developing a sustainable business and creating profitability it is also important that MNCs act in a responsible manner and also focus on People and Planet.

British Petroleum a MNC operating in the oil industry has recently been in the limelight for the largest accidental marine oil spill "The Deep Water horizon oil spill" which occurred on 20 April 2010. Today BP operates under a modern tagline of "Beyond Petroleum", operating across six continents engaged in the exploration, production, refining, trading and distribution of energy, quoting its values to be responsible, progressive, performance driven and innovative. (www.bp.com)

However the oil giant's future sustainability will depend on the impact it creates on all its stakeholders. While learning from its past mistakes, it will also need to maintain a strong ethical culture and ensure that it operates in a manner a conglomerate of its stature should.

3. Reasons for the oil spill

On 20 April 2010 at around 9.45pm methane gas from the Macondo well escaped on to the platform, ignited and exploded. A fire erupted on the platform resulting in the death of 11 workers. While all efforts to put out the fire became unsuccessful it resulted in the sinking of the Deepwater horizon oil rig on 22 April 2010. An oil leak was detected that afternoon.

On 8 September 2010 BP released a report on the findings of the causes of the Gulf of Mexico oil spill investigated by a team of more than 50 technical and other specialists from within BP and externally led by Mark Bly, BP's Head of Safety and Operations. According to the investigations the overall conclusion was that there was no singular reason or responsible party for the explosion but multiple reasons such as mechanical failures, human judgments, engineering design, operational implementation and team interface failures that contributed to the incident.

The reasons for the oil spill as per the investigations were as follows,

o The cement and shoe track barriers and the cement slurry used at the bottom of the Macondo well designed to contain hydrocarbons within the reservoir failed, allowing gas and liquids to flow up the production casing.

o Although well integrity was

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