The paper 'British Petroleum Oil and Gas Company - Project Failure" is a good example of a management case study. In many organizations across the globe, projects are taken to solve problems, satisfy needs, comply with the legal requirements or exploit opportunities. Some of these projects achieve their intentions while some do not. According to Abbasi et al. (2010), project failure refers to the inability of the project to achieve the desired outcomes. A project is considered successful if it delivers to cost, quality and time. Project failure results from both organizational and external factors.
Overall, some of the reasons that cause the failure of projects are; gaps in communication, poor management practices, the lack of clear project objectives and the lack of visibility of all projects. This paper discusses the causes and lessons learnt from project failure using the Deepwater Horizon Project of the British Petroleum Oil and Gas Company. Organizational and Project Overview British Petroleum Oil and Gas Company is one of the largest oil and gas producers in the world. Founded in 1909, the firm serves as the Anglo-Persian Oil and Gas Company with its headquarters situated in London.
The firm operates in more than 80 countries across the globe with an employee population exceeding 80, 000. It is the sixth-largest oil and gas company in the world by production and the fifth-largest by annual revenue. The company engages in the assessment, production, refining and distribution of hydrocarbon products. The largest division of the company is situated in the United States of America and operates under the name BP America. BP America is the second-largest oil and Gas Company in the United States with over 22,000 service stations and a daily average sale of 5.9 million barrels. According to Reeves, Locke, and Ingersoll (2012), the British Petroleum acquired the federal lease from the American government for the Mississippi Canyon 252 located in Venice, Louisiana for over $34 million.
The organization was highly confident in the seismic data of the region and the presence of oil, causing it to implement a $100 million project of drilling at the Macondo Well. To facilitate the drilling process, BP hired Transocean to provide the crew and oil drilling rig to drill the well.
Consequently, the drilling of the Macondo Well for oil began in 2009 using the Transocean Marina’ s semisubmersible oil rig. However, the drilling process was affected by the adverse impacts of Hurricane Ida, causing the process to be discontinued. In February 2010, BP commenced the drilling of the well using the Transocean’ s Deepwater Horizon rig. According to an investigation done by the British Petroleum in 2010, the Deepwater Horizon rig, which was leased at $500,000 dollars a day by Transocean had a wide range of maintenance issues.
A safety audit conducted by the organization revealed that the rig has approximately 390 repairs that would take 3500 hours of labor to fix. These issues caused an increase in the project budget. Initially, BP estimate that drilling and extraction of oil from the Macondo Well would take 51 days and cost approximately $100 million. However, by April 2010, the rig was on its 80th day of use, far exceeding the initial budget. However, despite all these concerns, the organization continued with the project because it was confident of the oil deposits in the well.
Abbasi, N, Wajid, I, Iqbal, Z &Zafar, F. (2014). Project Failures: Case Studies and Suggestions. International Journal of Computer Applications. Vol 86, No 6.
British Petroleum. (2010). Deepwater Horizon Accident Investigation Report. Accessed from
http://www.bp.com/content/dam/bp/pdf/sustainability/issue-reports/Deepwater_Horizon_Accident_Investigation_Report_Executive_summary.pdf. 14th April 2017.
Gill, C. (2010). Five Leadership Lessons from the BP Oil Spill. Harvard Business Review.
Gritz, D. (2011). Project Failures: What BP Disaster can teach us About Management. Computer Aid Incorporation.
Reavis, C, Locke, R.M &Ingersoll, C. (2012). BP and the Deepwater Horizon Disaster of 2010. MIT Sloan Management.
The Guardian. (2013). Deepwater Oil Spill, a classic failure of BP management, court hears. Accessed from
https://www.theguardian.com/environment/2013/feb/26/deepwater-oil-spill-trial-bp-failure. 14th April 2017.