Pob stage 1 seminar 12 v2 sbd
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Seminar: BP’s largest disaster – the Deepwater Horizon
Topic Number: 12
Principles of Business
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2
Overview
BP, one of the largest global oil companies, has in the past been criticised for its lack of safety and sustainability practises, with high accident rates and a low employee safety record.
Its biggest accident in recent years occurred in 2010 when one of its deep sea oil rigs (Deepwater Horizon) had a blow out that lead to the largest marine oil spill in history. This resulted in huge ecological damage and a fine of $4.5 billion for BP.
This seminar will look at how BP initially look at the reasons why the accident occurred and understand how BP responded to it.
We will also look at BP’s approach to sustainability and how they are trying to make re-brand their organisation to mend some of the reputational damage that has been done.
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3
Learning outcomes of this seminar
• Determine and describe the main reasons for the Deepwater Horizon disaster
• Highlight how BP responded to the disaster
• Be able to articulate BP’s approach to sustainability
• Recommend ways for them to improve their reputation in this area
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Agenda for this seminar
What is BP’s approach to sustainability?
Recommend ways for them to improve their reputation in this area
How did BP respond to the disaster?
What were the main reasons for the Deepwater Horizon disaster?
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Structure for the session
You will have 15 minutes to
discuss each question
We will have a de-brief at the end of each 15 minutes to hear your thoughts on each area
Feel free to ask questions but please do not have separate conversations ‘we are all in
this together’!
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An Introduction to BP
http://www.youtube.com/watch?v=Q4xwvKKE-fk
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BP: Upstream
Source: www.bp.com
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BP: Downstream
Source: www.bp.com
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What were the main reasons for the
Deepwater Horizon disaster?
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An overview of events
View video: http://www.youtube.com/watch?v=BrO87PQKTx0
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Key Issues at the time
Cement did not set properly in the well
shaft
Abandonment sequence rushed/not
done properly
Negative pressure tests
ignored
Blow out preventers failed to
function
But does this tell the whole story?
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Conducting a Why-Why Analysis gives us more insight into the wider issues
Inadequate regulatory environment coupled by increasing political pressure for further deep water drilling
Cement did not set properly in the well
shaft
Abandonment sequence
rushed/not done properly
Negative pressure tests ignored
Blow out preventers failed
to function
Cement tests undertaken resulted in
instable results (BP unaware)
Rushed to complete and not breaking
codes of conduct
Multi-tasking to complete job and non explainable
excuses made
BP sent Halliburton
home without final tests complete
Unprecedented bend in shaft caused failure
Lack of maintenance
Did not want to admit
failure to BP
BP did not feel the need to comply with standards of
safety
Need to complete the
job quickly
BP valued commercials over safety of
staff
Did not seek international best practise
Did not see the need to
maintain last line of defence
BP focused on small safety measures rather than process/operational safety measures
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An issue with corporate culture?
StoriesJohn Browne’s
legacy of cost cutting
SymbolsBP’s
dominance Of the
Gulf of Mexico
Power Structures
Heave top-down culture
OrganisationStructure
Head office Decision-making
Control Systems
Lack of adequate controls to
manage safety
Routines & Rituals
Sending contractors home and
deviating from process
Cultural Web
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How did BP respond to the disaster?
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Initially was not willing to take liability
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It was even underplayed
View video: http://www.youtube.com/watch?v=L10W8tgpPwc
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After all there were many players involved
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A countdown of events
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However they eventually did take charge…
View video: http://www.youtube.com/watch?v=ON9luL-w8tE
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What is BP’s approach to
sustainability?
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An opportunity to re-invent themselves
Source: www.bp.com
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Step 1: Why Change?
Poor Safety Record
£44bn lost on
its share price
45% reduction on mar cap
CEO change
Low employ
ee Morale
Brand tarnish
Source: www.bp.com
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Step 2: What to change
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Step 3: How to Change?
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Recommend ways for them to improve their
reputation in this area
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Source: https://www.youtube.com/watch?v=uq1yyI-TiAE
Can BP clean up its image?
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Failed efforts by BP
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Transparency is key
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Get external assurance
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Showcase Progress and Reporting
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Highlight other initiatives
View video: http://www.bp.com/en/global/corporate/about-bp/bp-worldwide/bp-united-kingdom/glasgow-2014.html
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Appendix – Sources for illustrations
Slide 6:www.inspiredbythis.com
Slide 9:www.fastcompany.com
Slide 10:www.smartappsforkids.com
Slide 11:www.interbrand.com
Slide 12:www.times.com
Slide 13:www.youtube.com
Slide 16:www.mashable.com
Slide 17: www.youtube.com
Slide 20:www.pingdom.com
Slide 21:www.bright-creations.com
Slide 22:www.iintothelook.wordpress.com
Slide 26:www.youtube.com
Slide 27: www.ted.com
Slide 28:www.youtube.com
Slide 29:www.apple.com
Slide 32:www.wallbeta.com
Slide 33: www.fool.com
Slide 34:www.plus.google.com
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End of Seminar
Note: This recording is for your personal use only and not for further distribution or wider review.
© Pearson College 2013
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