Bp Case Study

BP case study
The blowout of British Petroleum’s (BP) Macondo Prospect well in the deep water of the Gulf of Mexico, was the largest accidental oil spill in the world. The disaster which happened on April 20, 2010, caused 11 people died on the rig and numerous others sustained serious injuries, countless marine animals and organisms were destroyed. Since then, BP’s Chief Executive Officer (CEO) Hayward became the subject of intense criticism for his handling of the crisis. In the late July, BP announced that Hayward would step down as CEO after oil stopped leaking from Macondo well. Then U.S. President Barack Obama appointed a commission to investigate the accident and they found that the accident could have been prevented and placed considerable blame on BP. However, it also argued that the blowout was not only BP’s failure but also a whole industry accident which could not have been anticipated or expected by government.
The disaster of Macondo Prospect well is not an industry accident but a failure of BP. First, BP’s safety problem existed since the tenure of its former CEO John Browne. In order to win over its rivals such as Exxon and Shell, John Browne made his mark as a relentless cost cutter, establishing tough financial targets for each top manager. Moreover, he finances deep-water exploration in regions fraught with technological challenges and political risks. Thus, during John Browne’s tenure, BP’s revenues and profits grew substantially. However, BP’s safety record did not match the firm’s financial success. In March 2005, BP’s largest oil refinery in Taxes caused 15 death and 18 injures because of a fire. In 2006, BP’s Prudhoe Bay oil pipeline happened a major leak, which was the largest spill ever on Alaska’s North Slope. Second, John Browne’s taking over did not solve the safety problem of BP but make it worse.