INTRODUCTION TO BP’S DISASTER
THE SITUATION
• What happened?
• Founded in 1909 as the Anglo-Persian Oil company.
• The third largest energy company in the world.
• The biggest corporation in the UK.
• London Stock Exchange and New York Stock Exchange,
• constituent of the FTSE 100 Index.
THE SITUATION
• Active in over 80 countries
• Has 16 refineries.
• 22400 service stations
• Selling about 5.9 million barrels per day.
• Until mid-eighties BP = British government.
• After the privatizing in the nineties BP occurred in several scandals.
THE SITUATION
• 1993 till 1995, convicted to pay a 22 million USD fine.
• 2005 explosion in BP’s refinery in Texas, result: 15 deaths and 180 injured.
• 2006 BP shuts down their oil operations in Prudhoe Bay
• corrosion in the pipelines, caused millions of liters of oil to be spilled.
THE SITUATION
• 20th of April 2010 at 10 o’clock an explosion occurred at the ‘Deepwater Horizon’.
• The explosion was enormous eleven people killed instantly
• It kept burning for two days, before it collapsed and sunk,
THE SITUATION
• Ripped apart the pipe system millions of litres of oil started leaking
• at about thousand meters below the surface.
• In the history books as one of the biggest oil pollutions.
THE SITUATION
• How could it get this far?
• Privatizing the companies’ culture changed.
• Profit hungry CEO’s want sales rates as high as possible!
• Deep-sea drilling a risky business
• BP built the ‘Deepwater Horizon’,
THE SITUATION
• a 32,000 ton colossal.
• operating in waters up to 2,400m deep .
• Can drill to a maximum depth of 9,100m.
• BP had 65% of the share
• Anadarko 25%
• Mitsui 10%.
THE SITUATION
• the Macondo project wasn’t the rig’s first operation.
• the inevitable happened.
• tempest of speculations and accusations.
• an Associated Press investigation the Bureau of Ocean Energy, had failed,
• Mid-August situation under control the final stages of sealing the well.
THE CONSEQUENCES
• How can we prevent this?
• Can it be justified that a high level executive cuts corners?
• management of a company responsible for ignoring standard safety measures ?
THE CONSEQUENCES
• Most acts of recklessness don’t result in fatalities.
• Similarity drunk driving or speeding.
• to keep the risky behaviour under control
• Code of conduct
• independent control unit,
THE CONSEQUENCES
• What is being done so far?
• European commission is putting the UK government under pressure to ban drilling in the North Sea;
• In the US, the House of Representatives legislation that will block BP from getting futuredrilling permits in the US.
• BP set aside 32.2bn USD to meet the cost of the clean-up.
THE CONSEQUENCES
• Currently 17bn USD loss
• Big concerns in the UK crucial part of the pension funds rests on BP dividends.
THE CONSEQUENCES
• BP has made a strategic move replaced CEO, Tony Hayward, by an American (Bob Dudley).
• prevent a ‘cold war’ situation UK vs. USA
Bob DudleyTony Hayward
THE CONSEQUENCES
• Tens of thousands of people are heading towards bankruptcy.
• Damage claims against BP rising exponentially.
• BP willing to pay a lump sum if agreed on not pursuing them in court.
THE CONSEQUENCES
• BP is feeling the heat .
• Started billing their partners, Anadarko and Mitsui, for the clean-up costs.
• None of them is willing to pay unless investigations.
• BP reacted offensive willing to take legal actions .
THE CONSEQUENCES
• Latest calculations estimate 4.9 million barrels of oil have leaked into the waters of the Gulf.
• One barrel contains approximately 159 litres.
THE CONSEQUENCES
• Reports say that 65% of the spill is already been dealt with.
• With more than one million barrels of oil still left in the sea,
• the impact on fish and shrimp will strike the local economies.
CONCLUSION
• The BP story shackle in the chain of events leading up to a conclusion we should have made many years ago.
• Isn’t it dangerous that big multinational companies have more power than an average country?
• This cannot go on forever!
• Lessons should be learned,
• Consequences should be given!
Thank you for listening.