Bp - Deepwater Horizon

Background

An explosion on April 20, 2010 on the Deepwater Horizon offshore platform caused 11 deaths and the biggest oil spill in the history of offshore drilling. The estimated volume of oil that was released from the Macondo well to the Gulf of Mexico was about 5 million barrels (Bourne, 2010). British Petroleum (BP) was the primary developer of the Macondo field along with Transocean who owned the Deepwater Horizon. The US government named BP Exploration and Production Inc (subsidiary of BP plc through BP America (Corporate Watch, n.d.; Bloomberg Businessweek, 2011)) as one of the responsible parties in the accident and holds it accountable for the spill and cleanup costs (BBC, 2010).

BP History

The history of BP started in 1908 with the oil discovery in Persia and the creation of the Anglo-Persian Oil Company. In 1914, the UK government became one of the biggest shareholders of the company. In 1954, the company name was changed to The British Petroleum Company by the board of directors. Some of the biggest BP discoveries included natural gas in the English Channel, oil in Alaska and in the North Sea in the 60s and 70s. In 1987, the British government sold the remainder of its stake in BP, and the company became fully privatized. BP downstream operations (marketing and retail) currently cover more than 80 countries, while its exploration and production activities are present in 30 countries. Its core operations include exploration and production of hydrocarbons, refining and chemicals manufacturing, shipping, marketing, retail and renewable energy (bp.com, 2011)

BP corporate social responsibility and ethics

On their home page, BP states that they are a progressive, responsible, innovative and performance driven company. "We are committed to the safety and development of our people and the communities and societies in which we operate. We aim for no accidents, no harm to people and no damage to the environment" (bp.com, 2011). However, as some critics argue, the recent incidents show that the company has not learned ethical lessons, and that "a selfish emphasis on minimizing costs rather than ensuring safe operations has had horrendous effects in the Gulf and perhaps beyond" (Verschoor, 2010).

BP Texas City (USA) refinery explosion in March of 2005 killed 15 workers and injured 180 during start-up of an isomerisation unit. BP had to pay $21 million to OSHA (Occupational Safety and Health Administration) as a settlement for as many as 300 violations. BP also budgeted $6.8 billion to upgrade its US refineries and replace its corroded Alaska pipeline. BP also paid $2 billion to settle lawsuits. According to Mac Sheoin, (2010), BP blamed the incident on the mistakes made by its workers. BP spokesperson Ronnie Chappell said company investigators "didn't find evidence of budgetary