Essays on The BP Oil Spill Crisis of 2010 - Deepwater Horizon Oil Spill Case Study

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The paper "The BP Oil Spill Crisis of 2010 - Deepwater Horizon Oil Spill" is a perfect example of a business case study.   This essay is about the manner in which BP, one of the leading oil companies in the world, managed the crisis that followed an accident on one of its drilling sites off the Gulf of Mexico. On April 20th, 2010, an explosion occurred on the company’ s Deepwater Horizon oil rig (McMasters 2015). The explosion was largely attributed to a technical fault in the internal processes of the oil rig that caused highly explosive gases to leak (McMasters 2010).

As a result of the explosion, 11 workers of the company were killed and 17 got injured. Also, the accident caused a massive oil spill in the Gulf of Mexico, directly affecting the lives of individuals and the operations of industries in the states of Louisiana, Florida, Mississippi and Alabama. In this paper, three key issues related to the accident are examined. First, a brief description of the incident is presented. Secondly, a detailed examination of how BP responded to the crisis is provided.

Thirdly, a detailed analysis of the extent to which the company’ s response to the crisis was effective is presented. A brief description of the incident BP, one of the leading oil companies in the world, was operating a Deepwater Horizon oil well off the Gulf of Mexico at the time of the crisis. The company had leased the oil rig from a Swiss-based company called Transocean and was operating it on the Macondo oil well. According to details provided by the company, the accident that occurred on 20th April 2010 as a result of a series of technical faults in the operations of the well, followed by the repeated failure of the safety mechanisms that had been put in place to prevent the gas from leaking in the event of an explosion (BBC 2010). The accident caused serious damages to the reputation of the company, the environment and the lives of the employees of the company.

As a direct result of the explosion, 11 employees of the company died (Webb 2010). The employees who died were on the rig at the time of the explosion.

Also, 17 employees of the company were injured as a result of the explosion and the fire that burned for more than 36 hours (BP 2010). As well, the accident led to a massive environmental crisis as a result of a large amount of oil from the well spilling off the coast. It has been estimated that about 200,000 gallons of oil were leaking every single day during the crisis, causing unprecedented damage to the environment and the local tourism industry in the region (Beam 2010). At the organisational level, the company has estimated that is lost about $14 billion in handling the crisis that arose as a result of the accident (BP 2010).

A big percentage of this amount was spent on oil cleanup activities. Also, reports indicate that the shares of the company fell by about 7% as a direct result of the crisis (de Wolf & Mejri 2013, p. 48). The CEO of the company at the time, Tony Hayward, was later replaced in what was believed to be a move by the company to reclaim its reputation following the crisis (Walsh 2010).

References

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de Wolf, D & Mejri, M 2010, ‘Crisis communication failures: The BP case study,’ International Journal of Advances in Management and Economics, vol. 12, no. 2, pp. 48-56.

Jugo, D 2013, Crisis communication strategies in the corporate governance process, Proceedings of the 1st International OFEL Conference on Corporate Governance, 12 April, Dubrovnik, Croatia, viewed 20 February, 2017, .

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Lerbinger, O 2012, The crisis manager: facing disaster, conflicts and failures, Routledge, London.

McMasters, M 2015, BP Deepwater Horizon crisis – case study, LinkedIn, viewed 15 February 2017, .

Pancic, N 2010, Crisis communication in theory and practice: analysis of cultural influence, strategy applicability and stakeholder relevance in Australia and New Zealand (Master’s thesis, Unitec, Auckland, New Zealand), viewed 19 February 2017, .

Sandman, PM 2010, BP’s communication response to the Deepwater Horizon oil spill, Peter Sandman Risk Communication Website, May 5th, 2010, viewed 15 February 2017, .

Shogren, E 2011, BP: A textbook example of not how to handle a crisis, NPR, 21 April 2011, viewed 19 February 2017, .

Susskind, AM, Bonn, M & Lawrence, B 2015, ‘How the deepwater horizon oil spill damaged the environment, the travel industry and corporate reputations,’ Cornell Hospitality Report, vol. 15, no. 14, pp. 1-15.

Varnai, S 2010, Crisis communication as an effective tool of change management, viewed 20 February 2017, .

Walsh, B 2010, ‘Oil spill: goodbye, Mr. Hayward,’ Time, 25 July, viewed 15 February 2017, .

Wearden, G 2010, ‘Gulf oil spill: BP lacked the right tools to deal with crisis, chief executive admits,’ The Guardian, 3 June, viewed 19 February 2017, .

Webb, T 2010, ‘BP’s clumsy response to oil spill threatens to make a bad situation worse,’ The Guardian, 1 June, viewed 15 February 2017, .

Zaremba, AJ 2015, Crisis communication: theory and practice, M. E. Sharpe, New York.

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