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DEEPWATER HORIZON WELL EXPLOSION AND OIL SPILL

Team B1 Final Presentation

Leonardo Ang, John Carter, Maria de Amezola, Timothy Go, Semion Lipner Julio Pascual, Mayra Pieraliisi, Miguel Santodomingo

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About British Petroleum

Founded in 1909 as the Anglo-Persian oil company.

Renamed the British Petroleum Company in 1954.

Privatised between 1979 and 1987.

Merged with Amoco in the late 1990’s.

Early years focused on developing assets in the Middle East, steadling expanding to other countries and locations.

It is the third-largest energy company in the world.

Employs over 80,000 people and operating in over 80 countries and six continents

Revenues in 2010 of $298B

Structured in 3 business segments: Upstream Marketing and refinieries Alternative energies

Source: http://ww.bp.com

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Mission and Vision

CORPORATE STRATEGY Upstream profit growth, cost and capital efficiency Downstream turnaround, cost efficiency Alternative Energy focused and disciplined Corporate efficiency

“We help the world meet its growing need for heat, light and mobility. And we strive to do that by producing energy that is affordable, secure and doesn’t damage the environment.”

“We are at the forefront of delivering diverse, material and real solutions to meet the world's needs for more and secure, cleaner and affordable energy” ‘Beyond petroleum’

Source: http://ww.bp.com & BP Strategy presentation to shareholders March 2010

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Significant Events in History

5Environmental 

1993–1995: Hazardous substance dumpingIllegal dumping of hazardous wastes on the Alaskan North Slope.

2006–2007: Prudhoe BaySpilled over one million liters of oil in Alaska's North Slope

2010: Texas City chemical leakover 530,000 lbs of chemicals into the air of Texas City and surrounding areas

Safety

2005: Texas City Refinery explosion - 5 deaths, injuring 180 people and forcing thousands of nearby residents to remain sheltered

2006–2010: Refinery fatalities and safety violations – 3 deaths and 97 % of safety violations *by oil refiners between 06/2007 and 02/ 2010

2009: North Sea helicopter accident – 16 deaths

Political

2007: Propane price manipulation – fine of $303 million  to the US government

2008: Oil price manipulation - 1.1 billion Ruble fine $35.2 million for abusing antitrust legislation and setting artificially high oil products prices

Contributions to political campaigns - BP is the United States' hundredth largest donor to political campaigns

Source: Wikipedia

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The Deepwater Horizon Spill

20 April 2010 to 15 July 2010

Largest marine oil spill in the history of the petroleum industry (4,900,000M bbls)

Explosion with 11 men working on the platform killed and others 17 injured

Severe economic and health consequences for the local community

Study finds BP, Transocean and Halliburton at fault of incident. BP in particular, for negligence leading to event.

Major Causes Cement Leakage Lack of a

Blowout Preventer

Replacement of Drilling mud with Water

Source: Wikipedia

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Stakeholder Analysis

bp

CUSTOMERSGOVERNMENT

SERVICE CONTRACTORSAND SUPPLIERS

OIL AND GASCOMPANIES

COMPANY SHAREHOLDERS

ENVIRONMENTALAGENCIES / NGOs / MEDIA

COMMUNITY

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Stakeholder Analysis

IMPACT TO STAKEHOLDERINFL

UEN

CE O

F STA

KEH

OLD

ER

CUSTOMERS

GOVERNMENT

SERVICE CONTRACTORSAND SUPPLIERS

OIL AND GAS COMPANIES

COMPANY SHAREHOLDERS

ENVIRONMENTALAGENCIES / NGOs/ MEDIA

COMMUNITY

Past Oil Industry Accidents

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Exxon Valdez Oil Spill 

WHEN: 24 March 1989WHERE: Prince William Sound, Alaska (remote)CAUSE: oil tanker crashSIZE: 260,000 – 750,000 bbls

ACTIONS:Exxon assumes full responsibility.Exxon cleans up spill, spending $2B for cleanup and $1B to settle civil and criminal chargesHired scientists to assess damage and study the spill

EFFECTSChanges in regulations due to results of investigationsImprovement in safety and technical specifications

Pemex - Ixtoc 1 Oil Spill

WHEN: 3 June 1979WHERE: Gulf of MexicoCAUSE: loss circulation, blowoutSIZE: 3,000,000 bbls

ACTIONS:Pemex spends $100M to clean up the spill.Claimed sovereign immunity as a state-run company.

EFFECTSNo major changes cited in research.No long-term effects to coastline and continental shelf.

BP Texas City Refinary

WHEN: 25 March 2005WHERE: Texas City, TexasCAUSE: explosion, negligence

ACTIONS:BP fined $50M by local courts.BP paid $1.6B in compensation to victims of the incident.OSHA fines BP $87M for negligence.

EFFECTSChanges to regulations by American Petroleum Institute.BP made changes to its refinery standards and modified facilities.

Source: Wikipedia

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Next Steps?

Change company culture – focus on SAFETY above all else.

Create system of checks and balances that must be adhered to. (risk analysis and decision management)

Pay for all damages, take full responsibility. Make the first move.

Create stricter regulations, steeper fines. Enforce better.

Empower all stakeholders in each project to address unsafe conditions. Allow for public disclosure.

Develop better, safer procedures, techniques and equipment.

For British PetroleumFor the Oil and Gas Industry

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