...BP Case and The Gulf of Mexico Jorge Salazar Hawaii Pacific University MGMT 6000 September 23, 2015 BP Case and The Gulf of Mexico Introduction The BP case concerning the Gulf of Mexico dealt with the second largest company in the world at that time (2010), it was founded in 1908 and it had more than 92,000 employees. Deepwater Horizon had two main components, owned and operated by offshore oil drilling company (Transocean) and it was leased by BP Oil Company. The BP oil spill occurred in April 20, 2010, there were three major cracks that spilled the crude oil into the ocean. The blast occurred approximately 41 miles from the Louisiana coast. The leaked continued for about three months after the explosion from the Macondo well, it was estimated that anywhere between 35,000 to 60,000 barrels per day were leaked, it is estimated that after all was said and done, approximately 4.9 million barrels were spilled. It is also important to mention that 11 workers died when this explosion happened. When the spill happened it affected a lot more than BP was expecting; it wasn’t just the Gulf of Mexico sea life (sea turtles, marine mammals, coral and fisheries), but it also affected all of the shores of Texas, Louisiana, Mississippi, Alabama, and Florida. When it hit all of these states, it affected their tourism, fishing, food, and healthcare just to name a few of the things. President Barack Obama stated, “Already, this oil spill is the worst environmental disaster America has...
Words: 1756 - Pages: 8
...Business Summary | | BP is also BO (Big Oil). It is the world's third-largest integrated oil concern, behind Exxon Mobil and Royal Dutch Shell. BP explores for oil and gas in 30 countries and has proved reserves of 18.3 billion barrels of oil equivalent. BP is the largest oil and gas producer in the US and a top refiner, with stakes in 16 refineries, processing 4 million barrels of crude oil per day. BP markets its products in more than 80 countries and operates 22,400 gas stations worldwide. The company's reputation took a major hit in 2010 when one of its deepwater rigs, working less than 50 miles south of Louisiana, exploded and killed 11 workers. Millions of gallons of crude gushed into the Gulf of Mexico for months. Following the disaster in the Gulf of Mexico, BP stock lost more than half its value, until recovering a bit in July. The company's dividend has been suspended and the CEO replaced. The company is creating a $20 billion fund over the next three-and-a-half years to cover claims from the Deepwater Horizon catastrophe,and to pay for that and other costs, BP announced it would be selling $30 billion in assets over the next 18 months. The company also took a $32 billion pretax charge against second-quarter earnings to cover potential liabilities.BP p.l.c.was founded in 1889, has headquarters in London, the United Kingdom. The company provides fuel for transportation, energy for heat and light, retail services, and petrochemicals products, operates through two...
Words: 2418 - Pages: 10
...3.1. British Petroleum (BP) British Petroleum is a company, which focuses mainly on petroleum, but has some interest in alternative energy. It is one of the world’s largest oil and gas companies, which serves over 13 million consumers in more than 100 countries. The market of alternative energy is not as well developed, nor as profitable as oil, but it is a good future investment with the recently raising environmental concerns. BP recognized this on time and entered the solar market in the year of 1973.( History of BP Solar ) 3.2. Background Formed in 1908, The British Petroleum Company was originally called The Anglo-Persian Oil Company. The current name was given in 1954. BP adopted a re-positioning strategy in 1997 and the group chief executive, Lord John Browne, addressed the threat of global warming. Even though the oil industry does not have a good reputation in taking responsibility, BP was put first on the list of Fortune Magazine’s Global 100 Companies on Corporate Strategy. (“Changing the Game.” Stanford Social Innovation Review ) 4. British Petroleum SWOT analysis 4.1. What is SWOT analysis? SWOT analysis is a useful tool for decision making and understanding a certain business. SWOT is an acronym for Strengths, Weaknesses (internal for a corporation), Opportunities and Treats (external for an organisation). SWOT analysis is functional for strategic planning, business planning, marketing, business and product development, as well as research...
Words: 2378 - Pages: 10
...London, England. The initial name of BP is the Anglo-Persian Oil Company in 1909; in 1954 it changed to its present name British Petroleum. It is combined and reconstructed by the former British Petroleum, Amoco and ARCO (Atlantic Richfield Company). BP’s business has spread to many fields including oil and natural gas, alternative fuels, the production of petroleum based product, aviation fuels and its business about the solar electric power generation is also growing very fast. Since 1981, BP has set up 12 branch companies successively in many fields such as mineral, food, ship, international finance, international detergent with its business spread to more than a hundred countries all over the world. BP has nearly 110,000 employees work all over the world. In 2003, BP is ranked on the FORTUNE as the first five global top 500 companies. Deepwater horizon oil spill and deepwater horizon explosion On 20th April, 2010, the Gulf of Mexico suffered a lot from a great catastrophe of oil spill. The drilling platform of the British Petroleum Corporation exploded in the deepwater horizon in the Gulf of Mexico which led to 11 workers death and very severe environment pollution. This event is regarded as the most severe oil spill incident in the history of America.。 Many people are curious about this catastrophe and people did not know what cause it and what actions would BP take. According to the inspection report BP made on 8th September, BP thought this catastrophe is not only...
Words: 2694 - Pages: 11
...Situation analysis and strategic recommendations of BP After oil spill disaster in USA Table of content: Introduction 3 Executive Summary 3 Approaches 3 Background of BP 3 BP in USA 3 PESTEL analysis of BP in USA 4 Political Environment 4 Economic Environment 5 Socio-cultural Environment 6 Technological Environment 7 Legal Environment 7 Environmental Analysis 8 Summary 8 SWOT Analysis of BP 8 Strengths 9 Weaknesses 9 Opportunities 10 Threats 11 Summary 11 Strategic Recommendations 11 Porter’s Generic Competitive Strategy 11 Ansoff Model 12 Conclusion: 13 References & Bibliography: 15 Appendix: 17 Introduction: As the global business environment is turbulent and dynamic every business organisation should adopt their strategy with the changing business conditions and conduct external and internal analysis on regular basis to cope up with the changing environment. This paper will analyse the overall situation of BP in USA after the Gulf of Mexico oil disaster. The oil spill creates a new condition for their operation in USA and requires considerable and serious change in the strategic decision making and positioning of the company. Executive Summary: This paper will start with a brief background of BP. A PESTEL analysis will...
Words: 3910 - Pages: 16
...Analysis of BP’s Response to the spill in the Gulf BP’s Response to the Deepwater Horizon Spill On April 20, 2010 an unprecedented oil spill occurred in the Gulf of Mexico. BP suffered not only personnel and equipment loss, but public relations loss as well. Many Americans felt outraged at BP for the effects of the spill on the Gulf Coast communities. Although the media immediately discussed the environmental implications of the disaster, many people felt that the impacts on the Gulf Coast communities, such as the negative effects on the seafood and tourism industries, received inadequate attention. An article that came out less than two months after the spill in The Working Waterfront mirrored the feelings of many Americans, “Each day we are confronted with media coverage of oiled birds, coastal wetlands, beaches and aggrieved local politicians, but little about the personal and community impacts ” (Herz, 2010). BP lost its good reputation and needed to create an initiative to show its commitment to the communities in which it resides. In an attempt to rebuild its reputation, BP’s “Gulf of Mexico Restoration” website uses these three strategies: it uses testimonies of Gulf Coast locals to highlight BP’s understanding of Gulf communities; it uses images of its sponsored events to highlight BP’s involvement and immersion in those communities, and it uses repetition of the word “engage” to emphasize its commitment to the Gulf and the people in it. BP uses testimonies of southern-accented...
Words: 993 - Pages: 4
...The BP oil spill has become widely accepted as the worst manmade environmental calamity in US history. The disaster wasn’t a catastrophe solely because of the extent of harm it caused the environment, but also because of the lack of concern and benevolence BP (primarily their CEO Tony Hayward) showed towards most stakeholders. This paper will give an account of many of the primary errors that were committed by BP. Also, specific dates will be used as a timeline in order to emphasize BP’s lack of concern and ability to act in a legal and ethical manner during the crisis. On April 20, 2010, a Deepwater Horizon drilling rig exploded in the Gulf of Mexico, killing 11 workers and causing the worst environmental disaster in US history (BBC News, 2010). Although there were obvious concerns for the environment, many of these worries were eased when the US Coast Guard announced that they were confident that there was no oil leaking from the well; which was located nearly a mile below the ocean’s surface. Given the depth and location at which BP was working, it would seem illogical not to have a crisis management plan in place. Unfortunately for BP, the company never acknowledged any real risk of a Deepwater oil spill. Thus, BP did not appear to have any related response plan in place. As they previously sought to expand Deepwater oil exploration, along with the rest of the oil industry, BP categorized a Deepwater spill as decidedly unlikely and claimed that if such a spill occurred...
Words: 1046 - Pages: 5
...This paper describes the situation at the United States (US) based company, Global Communications (GC) in the telecommunication industry. Different challenges and opportunities at GC are discussed. The paper continues by discussing the different stakeholders' perspective/ethical dilemmas and continues by framing a problem statement for the Global Communications situation. An expected end state situation is then described for GC scenario. The paper continues by analyzing different alternative solutions to the Global Communications situation , the risk for each solution is described and an optimal solution from a numbers of alternative solutions is selected. An implementation plan for the selection solution for the Global Communications situation is described and a metrics to monitor the plan is presented. This paper concludes by reviewing the selected solution to the situation and discussing the expected result. Issue and Opportunity Identification As a result of competition from cable companies, the United States based company, Global Communication (GC) is losing market share and profitability in the telecommunications market. The traded stock value has dropped from $28 to $11 in a two year period and stockholders are receiving diminishing returns (University of Phoenix, 2006). The stockholders have lost confidence in the management. Management is under pressure to renew stockholders confidence by increasing returns on the stock and the traded stock value. Senior management...
Words: 2824 - Pages: 12
...Bp also known as British Petroleum “is one of the world's leading international oil and gas companies, providing its customers with fuel for transportation, energy for heat and light, retail services and petrochemicals products for everyday items.” This establishment has over 80 operations under its umbrella ranging from the United States to Australia. Oil companies such as BP constantly try to find the next best way to dig and find oil underneath the surface of the earth. Not only do they have well educated persons there to help measure, dig, etc., but they also have a great number of technological resources. The resources that are used include: 3D film that Geologists look at in a room called the HIVE (highly immersive visual environment). In this room, all persons that deal with finding oil come together and view this film to help determine where to drill and how successful they will be in doing so (BP). Finding oil is a science, there isn’t much guessing done without tools and maps to find it. Before there were a host of technology-based programs, oil companies had to search for oil by finding natural oil bubbles that came to surface in what is called a seapage (BP). Even then, there were no true promises that if the drilling began that they would strike gold, they just hoped that there was something deep beyond the earth’s surface. According to BP, “drilling is the only sure way to find out whether there is oil or gas down there”. There are also precautions that are...
Words: 3224 - Pages: 13
...The global ethical position of BP and their exploration of the Gulf oilfields. BP (formerly British Petroleum) is one of the world’s largest oil and energy companies, which provides fuel, energy and petrochemical products. They have been in existence since the early 1900’s and have gone through a number of changes. In July, 2003 after merging with Amoco they rebranded as a ‘beyond petroleum’ company. Their logo, a sunburst of green, yellow and white, symbolizes dynamic energy in all its forms. (BP, 2010). Their ‘beyond petroleum’ tagline featured BP as a company that was concerned with the environment and its corporate social responsibility (CSR). BP’s Director of Business ethics outlined their commitment to ‘being ethical’, which included respect for human rights, avoiding harm to people and the environment , avoiding conflicts of loyalty and interest. (Broome 2003). However, as a result of the oil spill in the Gulf of Mexico in 2010, BP’s ethics policy have been placed under extreme scrutiny, exposing them as a company whose marketing strategies is misaligned to their actions. This article looks at BP’s global ethical position with regards to their exploration in the gulf oilfields. It takes a further look at the implication that it caused to their branding and marketing strategies and suggests what marketing strategies they should adopt in order to move forward and regain sustainable competitive advantage. One of BP’s strategies is to create value for shareholders...
Words: 2377 - Pages: 10
...Disaster in the Gulf: One Year Later 1. What external environment (general, industry, and competitive) segments do you think BP considered or didn’t consider prior to their drilling of the Gulf Coast? What should the wedding business owners now consider in their external environment? BP decided to drill in the Gulf Coast mostly because of the oil availability and competition. Opportunity was definitely considered by BP. The North Sea was saturated with other oil companies and BP saw an opportunity in the Gulf of Mexico (Pour, 2011). The segment that BP did not do well is the environmental factors around the rig that could make it extremely difficult to repair or monitor when troubles occur. The deep water makes it difficult for them to ensure the cement foundation was sealed properly, and pressure tests were misinterpreted by engineers prior to the explosion (Mullins, 2010). The wedding business owners are now facing the threat from these drilling rigs. The oil industry has a long track of catastrophic failures, so a disaster like the BP spill might happen again. They should consider other business opportunities to complement their current business model in case a spill or leakage occurs. 2. How should BP have handled an external environmental analysis and what environmental changes and trends (opportunities and threats) might they have discovered? BP is one of the biggest oil companies and it has a very strong market and geographical presence around the world (MBAskool...
Words: 1109 - Pages: 5
...BUSINESS RESEARCH PROJECT BRP BP Business Research Report Content I. Corporate Profile …………………………..…1 II. Management…………………………………..2 III. Financial Statement Analysis……….……3 IV. Marking Strategy ……………………………..8 V. Cross-cultural Issues………………………..10 VI. International Business……………………11 VII. Human Resources Issues………………..12 VIII. Gulf of Mexico Oil spill…………………..16 IX. Conclusion……………………………………..18 X. Appendix ..………………………………………..20 1 BP Business Research Report I. Corporate profile BP, a public limited company in the industry of oil, natural gas and alternative fuels, runs its business in the exploration, production, refining, trading and distribution of energy. The products are mainly BP petroleum and derived products serving an area worldwide. BP was founded in 1909 as the Anglo-Persian Oil Company and renamed as British Petroleum Company in 1954. A merger of British Petroleum and Amoco in 1998 modeled the greatest petroleum company all over the world---BP. Headquartered in London, UK, BP launched its new green, white and yellow logo in 2000 which is designed to show the company's commitment to the environment and solar power. Bob Dudley performs BP’s CEO since Oct. 2010 and Carl -Henric Svanberg is chairman of the group. BP’s vision “A force for good” underlines all its activities worldwide. All BP’s 79,700 employees live under its corporate culture Slogan—Different people, common goals. BP ranked 4th in Fortune Global 500 in...
Words: 7262 - Pages: 30
...Ethics Case Analysis BP BP Struggles to Resolve Sustainability Disaster Case Summary: The BP oil spill in the Gulf of Mexico in April 2010 is the worst oil spill in US history. Initial claims on the scope of the spill, as released by BP, was that 5,000 barrels per day were being released into the water, although they stated they had no way of precisely measuring the spill. Outside analysts have stated that between 54,000 and 84,000 barrels per day were leaking into the area. This estimate has been largely supported and accepted. The spill lasted for 87 days before workers finally sealed the leak, but by that time, more than 4 million barrels of oil had been released into the gulf. The BP oilrig, owned by Transocean, Deepwater Horizon had been in operation in the Gulf of Mexico since February 2001. The rig was valued at more than $560 million dollars and worked on many different wells in the gulf. The last well it operated on was the Macondo well. It was this well that the oil spill came from and was brought about by several preventable errors on the part of BP and Transocean management and employees. The Deepwater Horizon vessel was an exploratory rig assigned the duty of finding oil, reporting it, and capping the well for another extracting type rig to come in and harvest the oil. While drilling the well, the rig encountered pockets of natural gas buildups where it was drilling. A week prior to the fatal explosion, Horizon encountered one of these pockets and the natural...
Words: 5006 - Pages: 21
...the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://blogs.ft.com/energy-source/2010/03/02/bps-strategy-presentation-growth-cost-cuts-biofuels-ma-and-more/#ixzz3AHpONpiH Overall, the theme from Tony Hayward, the CEO, is that BP has great assets, in part thanks to the deals of the past decade, such as the takeovers of Amoco and Arco and the creation of TNK-BP, but is still not managing them as well as it could. Having lagged well behind the pack of oil majors when Hayward took over, as measured by return on capital, BP is now about average, but it would like to get closer to the leader, Exxon. That is the context for all the plans B The key points of that plan are: 1. $3bn to be saved through cost-cutting and efficiency improvements over the next 2-3 years. 2. Roughly $2bn from refining, putting the emphasis on efficient operations rather than just getting the refineries running, which has been the priority. A further $1bn from better project management, resulting from the creation of a new global development unit to manage big projects, which have a tradition of over-shooting their budgets at BP, as they do at many other companies. - As a small part of that, BP is pulling out of its marketing business in Namibia, Malawi and some other southern African countries. - Production growth expected to average 1-2 per cent per year during 2008-15, and hopefully for...
Words: 1759 - Pages: 8
...British Petroleum What we know today as British Petroleum is the result of several companies being bought and sold over many years. One of the companies, Standard Oil Company was created in 1870 by John D. Rockefeller in Cleveland Ohio. By 1892, while still not selling gas products, Standard Oil companies was providing lubricating products to keeps parts on horse drawn wagons moving friction-free. One of the other companies, the Angelo-Persian Oil Company was formed in 1905. By 1908 they were producing gas products and in 1912 they discovered a way to double the output of gasoline produced from a barrel of oil. At the same time they were able to find a way to increase the octane level of the gasoline produced. Industry Analysis Today, British Petroleum is one of the largest energy companies in the world. They provide their customers with fuel for transportation, energy for heat and light, retail services and petrochemical products for everyday household use. British Petroleum is involved in exploring for oil and other natural resources that can be converted into power. British Petroleum is committed to finding fuel sources that reduce green house gases and reduces the carbon footprint. They hope to accomplish as they research and refine alternative fuel sources such as fossil fuels, solar power, wind power, hydrogen, and natural gas. Competition in the oil and energy industry is furious. British Petroleum competes with companies like Exxon-Mobil and Chevron in three...
Words: 1820 - Pages: 8
