BP & Deepwater Horizon
BP & Deepwater Horizon
Every business, in some way, is affected by public and private criticism. One industry that is never too far away from criticism is the oil and gas industry. Over the course of this essay, we will explore BP, its stakeholders, some of their criticisms, and BP’s response to those criticisms.
BP, formerly British Petroleum, is the fourth largest oil and gas companies in the world in terms of revenue and sixth based on production. (Statista, 2015) (Forbes, 2015) Although BP doesn’t have an official mission statement, the company does have a few statements entitled “Our Values”, “Clear ...view middle of the document...
As most remember, this 2010 disaster occurred as a result of fire and explosion aboard the Deepwater Horizon oil drilling platform in the Gulf of Mexico. Although the platform was owned and operated by offshore drilling contractor Transocean Limited, this event has become widely known as the BP oil spill. According to Natural Resource Damage Assessment (2012), nearly 172 million gallons of oil was released into the Gulf over the 87 days the well was allowed to flow. As a result of this disaster, many natural resources, communities, and people were affected. Some of the stakeholders that were affected included communities, governments, non-governmental organizations, shareholders, others in the oil industry and contractors.
Shortly after the news of the oil spill had been published, the United States government was quick to respond. President Barack Obama issued a statement setting a moratorium on new offshore oil drilling in U.S. waters and directing the Secretary of the Interior to report on any steps needed to prevent other leaks similar to the Deepwater Horizon incident. (Johnston & Nichols, 2010) According to the press statement made by President Obama (2010), the government was responded to the disaster utilizing the resources they had but the ultimate responsibility would lie with BP under U.S. law.
Another stakeholder was representation from the oil and gas industry. The American Petroleum Institute and other industry leaders created the independent Center for Offshore Safety. According to then-API President Jack Gerard, “the center will ‘promote the highest level of safety for offshore operations, through an effective program that addresses management practices, communication and teamwork.’” (Fowler & Dlouhy, 2011) According to a report by Angel Gonzalez in The Wall Street Journal (2010), “Four of the world’s largest oil companies are creating a strike force to stanch oil spills in the deep waters of the Gulf of Mexico in a billion dollar bid…” As we can tell, the oil and gas industry tried to mediate the impact this disaster had on their industry.
The broadest criticism had come from the general public. Recapping the events, there were calls for boycotts of BP, petitions, and protests. These actions led to declined sales for that period between 10 and 40 percent. (Weber, 2010) The ramification of this disaster is still in the minds of many Americans.
The aftermath of the Deepwater Horizon oil spill had ultimately negatively affected the image and opinion of BP. In light of this, BP apologized in a statement (n.d.) saying “We regret the impacts on the environment and livelihoods of those in the communities affected.” They continue, “We have, and continue to, put in place measures to help ensure it does not happen again.” BP, along with the U.S. government, took on the responsibility for cleanup and compensate those affected by the accident. Combined costs arising out of cleanup, legal and...