1. Principles of Business
Seminar: BP’s largest disaster – the
Deepwater Horizon
Topic Number: 12
2. 2
Overview
BP, one of the largest global oil companies, has in the past been
criticised for its lack of safety and sustainability practises, with
high accident rates and a low employee safety record.
Its biggest accident in recent years occurred in 2010 when one
of its deep sea oil rigs (Deepwater Horizon) had a blow out that
lead to the largest marine oil spill in history. This resulted in
huge ecological damage and a fine of $4.5 billion for BP.
This seminar will look at how BP initially look at the reasons
why the accident occurred and understand how BP responded to
it.
We will also look at BP’s approach to sustainability and how
they are trying to make re-brand their organisation to mend
some of the reputational damage that has been done.
3. 3
Learning outcomes of this seminar
• Determine and describe the main reasons for the
Deepwater Horizon disaster
• Highlight how BP responded to the disaster
• Be able to articulate BP’s approach to sustainability
• Recommend ways for them to improve their reputation in
this area
4. Agenda for this seminar
What were the main reasons for the Deepwater Horizon disaster?
How did BP respond to the disaster?
What is BP’s approach to sustainability?
Recommend ways for them to improve their reputation in this area
5. Structure for the session
You will have
15 minutes to
discuss each
question
We will have a
de-brief at the
end of each 15
minutes to hear
your thoughts
on each area
Feel free to ask
questions but
please do not
have separate
conversations
‘we are all in
this together’!
9. What were the main
reasons for the
Deepwater Horizon
disaster?
10. An overview of events
View video: http://www.youtube.com/watch?v=BrO87PQKTx0
11. Key Issues at the time
Cement did not set
properly in the well
shaft
Abandonment
sequence
rushed/not
done properly
Negative
pressure tests
ignored
Blow out
preventers failed to
function
But does this tell the whole story?
12. Conducting a Why-Why Analysis gives us more
insight into the wider issues
Cement did not set
properly in the well
shaft
Abandonment
sequence
rushed/not done
properly
Negative pressure
tests ignored
Blow out
preventers failed to
function
Inadequate regulatory environment coupled by increasing political pressure for further deep water drilling
Cement tests
undertaken
resulted in
instable results
(BP unaware)
Rushed to
complete and
not breaking
codes of
conduct
Multi-tasking
to complete
job and non
explainable
excuses made
BP sent
Halliburton
home without
final tests
complete
Unprecedente
d bend in shaft
caused failure
Lack of
maintenance
Did not want
to admit
failure to BP
BP did not feel
the need to
comply with
standards of
safety
Need to
complete the
job quickly
BP valued
commercials
over safety of
staff
Did not seek
international
best practise
Did not see
the need to
maintain last
line of defence
BP focused on small safety measures rather than process/operational safety measures
13. An issue with corporate culture?
Stories
John Browne’s
legacy of
cost cutting
Symbols
BP’s
dominance
Of the
Gulf of Mexico
Power
Structures
Heave top-down
culture
Organisation
Structure
Head office
Sending contractors
Decision-making
Routines
& Rituals
home and
deviating from
process
Control
Systems
Lack of adequate
controls to
manage safety
Cultural
Web
22. Step 1: Why Change?
Poor
Safety
Record
£44bn
lost on
its
share
price
45%
reducti
on on
mar
cap
CEO
change
Low
employ
ee
Morale
Brand
tarnish
Source: www.bp.com
