BP & the Deepwater Horizon Disaster of 2010

Executive Summary

The Deepwater Horizon disaster of 2010 revealed the vulnerability of oil drilling in the open sea water. The disaster was the major safety breach admitted by BP in the context of the declared strategy oriented on the enhancement of the safety of its operations and environment friendly policies implemented by the company. The disaster was the result of multiple factors among which the lack of central control and excessive autonomy of local units and operators. This is why the company should consider changing its operations and enhancement of control over operators of rigs and oil drilling platforms.

Statement of Immediate (obvious) Problem

The major problem of BP which caused the Deepwater Horizon disaster was the lack of safety program that could prevent such disaster. At any rate, safety programs and standards adopted by BP had proved to be ineffective. The use of subcontractors, who performed the large part of the work BP would be responsible for resulted in the disaster, where there were just 7 employees of BP, who could hardly be fully responsible for the disaster, while the public perceives BP as the only party responsible for the disaster. As a result, the company’s strategy turned out to be the complete failure in terms of outsourcing some services and enhancement of safety.

Situation (SWOT) Analysis

a)    Strengths

  •             BP had considerable resources to ensure high safety standards
  •             BP did have high safety standards
  •             BP had technological advancements and achievements that allow securing oil drilling in the sea

b)   Weaknesses

  •             The organizational structure of BP provides too much autonomy and lacks central control over units that perform drilling as was the case of Deepwater Horizon
  •             The company has too many units and outlets which are difficult to control
  •             The company is concerned with optimizing costs that increases the risk of compromising safety.

c)   Opportunities

  •             The company has opportunities to enhance safety
  •             BP can enhance the use of alternative sources of power
  •             BP can monitor drilling processes more thoroughly.

d)   Threats

  •             The growing complexity of drilling because oil deposits are located in remote areas       
  •             Unreliable suppliers of materials and services
  •             Challenging environment, where the company has to operate.

Two Macro factors and two Micro factors            

The process of globalization and elimination of barriers between countries encouraged outsourcing and employment of professionals from other countries and companies. As a result, there were just 7 employees of BP on the rig at the moment of the accident among 126 professionals, who worked on the rig at the moment.

Another macro factor that triggered the disaster was the growing complexity of drilling since conditions of drilling in the area, where the disaster had occurred was very difficult and needed high technologies and high safety standards.

One tradeoff with the asset federation model was that because each site manager managed their “asset” autonomously and was compensated for its performance, there was little incentive to share best practices on risk management among the various BP exploration sites.

BP faced the problem of downsides to a system in which a centralized body had little oversight over the setting of performance targets, particularly in an industry where risk management and safety were essential to the long-term success of an oil company. This is why the company suffered safety breaches and the accident in the Gulf of Mexico became one of such breaches.

Action Plan

What

The company should enhance safety through the development of the stricter quality and safety control system to prevent accidents like Deepwater Horizon in the future

Whom

The company should introduce the safety control department that will focus on safety of drilling, equipment, employee training and other issues to ensure the high safety of all outlets of the company.

Why

The enhancement of safety is essential to prevent new accidents and enhance the marketing position of the company.

How

The safety department should monitor the performance and safety standards of the company and all of its units and organize the extensive training of all employees along with monitoring all suppliers and subcontractors to ensure their compliance with high safety standards of BP.

Works Cited:

Ingersoll, Christina, Locke, Richard M., and Reavis, Cate. BP and the Deepwater Horizon Disaster of 2010, MIT Sloan Management, 2012.

The terms offer and acceptance. (2016, May 17). Retrieved from

[Accessed: March 28, 2024]

"The terms offer and acceptance." freeessays.club, 17 May 2016.

[Accessed: March 28, 2024]

freeessays.club (2016) The terms offer and acceptance [Online].
Available at:

[Accessed: March 28, 2024]

"The terms offer and acceptance." freeessays.club, 17 May 2016

[Accessed: March 28, 2024]

"The terms offer and acceptance." freeessays.club, 17 May 2016

[Accessed: March 28, 2024]

"The terms offer and acceptance." freeessays.club, 17 May 2016

[Accessed: March 28, 2024]

"The terms offer and acceptance." freeessays.club, 17 May 2016

[Accessed: March 28, 2024]
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