BP Oil Spill
Strategy and Corporate Governance
The bp oil spill of 2010
British Petroleum (BP) is one of the largest oil exploring companies in the world. It is recognized for its efficient practices. In recent years it has positioned itself as an environmentally responsible company by stressing its commitment to undertaking exploration activities by causing minimum harm to the natural environment. It has also invested in technologies to make drilling under the seabed more secure so that oil spills do not occur. However, these claims were brought into question on April 20, 2012 when a massive explosion and oil spill took place on the Deepwater Horizon oil rig over the Macondo oil well in the U.S. Gulf. There was huge damage to the marine environment and to the livelihood of people living in the coastal communities in Louisiana and other coastal states. The poor response of the company was shocking to many and suggests a need for reform in its management culture.
Main Events Leading to the 2010 Oil Spill
The Deepwater Horizon rig off the U.S. Gulf Coast had been drilling oil from the seabed since 2001. In 2010 Transocean was operating the rig under license from British Petroleum. On April 20, 2010 an explosion due to a gas leak occurred on the oil rig on which 126 crew members were operating (BP, 2012). Fire erupted as a result of the explosion and 11 crew members went missing after the incident. The number of injured members was estimated at 17 (Guardian, 2010).
Blowout Preventer
The response mechanism consisting of a blowout preventer failed to activate following the explosion. The next day, a search team comprising of members from Transocean, BP and the U.S. Coast Guard began a search for the missing crew members while the rig continued to burn. The next day, the oil rig sank after burning for two days. The big threat now was a massive oil spill from the well. Efforts were needed to seal the exposed well so that oil spills could be prevented. On the following day, the search for the missing crew members came to an end without any rescues being made. On April 25, a blowout preventer was used to try and seal the well. However, the effort was unsuccessful and the oil spill continued.
Magnitude of Leakage
On the same day, underwater cameras deployed by the U.S. Coast Guard revealed that the well was leaking an average of 1,000 barrels of crude oil per day. This estimate was revised the next day when the Coast Guard reported that 5,000 barrels per day were being leaked into the ocean (Guardian, 2010).
There were three leaks in all reported by the coast Guard (Guardian, 2010). On April 28, BP began a series of controlled burns to consume the oil before it could cause further pollution in the sea. The state of Louisiana declared an emergency as the oil spill began approaching the coast on 29 April. To plug the well that was still leaking, a relief well was set up on May 2 to seal the well ad control the damage. A week later, efforts were made to place a containment dome over the leak to stop the continued spill. This attempt also proved to be abortive. On May 5, one of the three valves was successfully shut off but this did not reduce the volume of oil leaking out.
Efforts by BP
On May 8, the plan to place a containment dome over the larger leaks and pump out the oil was also abandoned. On the same day, BP released a report in which the cause of the explosion was identified as a methane bubble. Another similar plan to use a capping dome failed on may 12. On May 13, the amount of crude oil leaking from the well was estimated to be 70,000 barrels per day (Guardian, 2010). Construction on a second relief well began on May 16. On May 20, BP's efforts at drawing up oil from the well through a through an insertion tube were marginally successful at bringing up 5,000 barrels per day.
Negligence with Regard to the Alarm Systems
During the early part of July some of BP's efforts at containing the oil spill and drawing it out were showing signs of success. On July 15, the oil spill was stopped for the first time since it began. On July 23, it came to light that the alarm system on the rig had been switched off on the day of the explosion (Guardian, 2010). On September 23, a report was released estimating that a total of 4.4 million barrels of oil had leaked into the Gulf during the first three months of the oil spill (Guardian, 2010).
Identification of Wrong Moves made by BP
Investigations that...
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