BP case study

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…..