BP case study
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GET Presentation
Prepared by-:
MOHIT SINGLA
& TEAM
We are what we repeatedly do, excellence therefore,
is not an act but a habit.
Safety Moment
Case Study on working of BP
Putting profit before safety ?
To take learning from the RECURRING mistakes of BP, and the
initiatives taken to REGAIN its LOST REPUTATION.
Wise man learn from his own mistakes
But
Wiser one learn from others mistakes
OBJECTIVE
Overview Of The Presentation1. Introduction to BP
2. Major Disaster and their Cause
3. Bakers recommendations
4. Financial Impact
5. Major Safety Initiatives
BP: journey to Beyond Petroleum
Is One of the Six Oil And Gas "Supermajors“
PRIMARY PRODUCT- OIL AND NATURAL GAS
OTHER PRODUCT- BIOFULES AND WIND ENERGY
HEADQUATER -London, England, United Kingdom.
1. The 5th largest energy company by Market Capitalization
2. Annual Turnover around $338.285 billion
3. 4th Largest Company registered with FTSE 100 index.
4. With 85,700 no. employees
KEY HIGHLIGHTS-:
????
WHY
SAFETY vs PROFIT
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
0102030405060708090
100
60
46
3226
44
32
90
2214 12
38
50
6 10
FATALITIES
??
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120
50100150200250300350400450500 461 450
327
272239 230
305
188167 175
134
408
168 152
Injured
Some Realities Relating To Accidents
Major Disasters
1. In Texas,2005
2. In ALASKA,2006
3. In GULF of Mexico,2010
HYDROCARBON VAPOR CLOUD EXPLOSION
at BP's Texas City refinery in Texas City, Texas
On the 23rd, March 2005
• Fatality 15 Workers
• Injuring More Than 170
• Market Share Price Down By 6%
• About $ 2 Billion For Compensations And Penalties By Gov.
HIGHLIGHTS-:
Tragedy In Texas
Immediate cause:excess gasoline spilled into a vent system which led to explosion after ignition.
Sequence of events leading to the immediate cause:
Lack of proper training of workforce.
Step-up supervisors didn’t complete all the checks properly before startup.
Liquid overflow from stack.
Improper communication to top officials about disablement of alarms.
Cause
ALASKA TRAGEDY• Largest Oil Spill On Alaska's North Slope On March 2, 2006
• 267,000 US Gallons Oil were spilled over 1.9 acres
• $255 Million Fine was imposed for negligence
• Cost US $100 Million to replace the 16 miles (26 km) of corroded pipeline.
• Price Of Crude Oil on NYMEX jumped US$2.22 a barrel closing at US$76.98 per barrel
• BP shares slumped nearly 2 percent.
Immediate Cause:
A corroded transit pipeline spilled 2,67,000 gallons of oil in early 2006.
.
UT technology was used since1998 instead of the PIG(pipeline inspection gauge).
Water was substituted for corrosion inhibiting chemicals since 1998
Corrosion in the transit pipeline
Ineffective leak detection system.
No replacement of deficient systems
Sequence of events leading to the immediate cause:
Cause
Gulf of Mexico• Deepwater Horizon oil spill on 20 April 2010 in the Gulf of Mexico
• Claimed 11 Lives and 16 injured.
• The Largest Accidental Marine Oil Spill of The History
• Total Discharge Has Been Estimated At 154.3 Million US Gallon
• DEAD-More Than 1,200 Fish, 200 Birds, 227 Sea Turtles And 29 Marine
Mammals
• Company's Total Spill-related Expenses Is Around $42.2 Billion
• Market Share Price Down By 43%
Immediate Cause:
High pressure methane gas from well expanded into drilling riser and went to
drilling rig and it caused an explosion.
Absence of blow out preventers
Use of sub standard quality of cement for the wall of oil well
Alarms had been overridden.
All critical digital and analog drilling instruments were not calibrated
Overdue maintenance jobs of 3,545 man-hours.
Sequence of events leading to immediate cause:
Cause
Common Shortcomings
Lack of Leadership
Focus on short term Profit
Negligence
Improper work Culture
Lack of communication
Improper planning
Government leniency
OR
????
Financial Impact
Value (US$) Site/Business
175,000 Alaska
210,000 Maryland
294,000 Whiting
300,000 Carson
8,000,000 Whiting
2,13,027,000 Texas City refinery
42,30,000,000 GULF OF MEXICO
Fines And Penalties
US$
YEAR (2000’S)
63
27
46
MAR 2010
Market Share Price
2008 2009 2010 2011 20120
50100150200250
196.99153.32
192.44234.25 237.02
SALES (B US$)
2008 2009 2010 2011 2012-5
0
5
10
15
20
11.54 10.62
-2.41
16.03
7.31
NET INCOME(B US$)
??
Profits
SAFETY PROFIT
IT IS NEVER TOO LATE TO Begin
BP’s Safety Initiatives
OMS- Operating Management System
• OMS are Guiding Principles and requirements for safe, reliable and compliant
operations.
• It addresses 8 ‘elements of operating’, under the areas of people, plant,
process, and performance
• It covers health, Safety, Security, The Environment, Social Responsibility And
Operational Reliability, Maintenance, Contractor Relations
It provides with one systematic
and
controlled holistic approach for
how businesses are managed.
13
2
4 5 6
Site Alignment (Two-way Communication)
RESULTS
• Environment Spills Cut By Half
• Safety Incidents Cut By 2/3
• Move From 'Worst To First' In Regional Safe Results
• Regional Record In Production Uptime
• 25% Reduction In Rig Work Over Cost
• Maintaince Backlog Reduced By 12000 Hours
(Bulwer refinery in Australia)
In 2013, Site Alignment is projected to get implemented in 60 sites.
Site Alignment (Two-way Communication)
Process Safety• Building Organizational
Capability
• Participative in Safety Initiatives And Risk Assessment is
now one of deciding factor for Bonus given to Employee
Takeaways From This Case Study• Operational safety is equally important as personal
safety.• Problems raised by shop floor associates should be
communicated to the higher levels at the latest.• Neglecting Safety may give short term profits but
finally leads to huge loss.• Site Alignment is one of the best practices• Cost cutting should not be at the cost of safety.
Safety is not an individual’s responsibility, but
the entire organization’s.
Thank You
We can & we shall…..
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