Oil Spills- a Blot on Bps Reputation

BP operates in 6 continents namely Africa, Asia, Austrailia, Europe, North America and South America and its products and services are present in around 80 countries.In terms of the reach, oil productions and retail stations, the most important country for BP is USA, closely followed by Europe. However, As regards developing countries, BP holds strong interests in Columbia and Venezuela, besides countries in Southeast Asia (Indonesia) and Africa(Egypt). In the recent BP has also expanded its business in socially sensitive locations worldwide like Angola and Azerbaijan.

As a company, BP has always been under public scrutiny and criticism for many reasons. One of the main reason it had to bear a huge amount of people's wrath in the recent times was the Gulf Of Mexico oil Spill.

Some major challenges faced by BP today are-

1.Protection of its Reputational

2. Sustainable environment friendly practices

3. Dealing with geo political changes in the world

4.Mitigating financial losses

Oil Spills- A blot on BPs reputation-

On April 20, 2010, BP's Deepwater Horizon oil rig exploded, killing 11 rig workers and setting off a massive oil leak at the mouth of the damaged deep-ocean well. Months later, the ruptured well, situated 50 miles off the Louisiana coast, continued to spew millions of barrels of oil into the Gulf of Mexico, causing an ever-widening spread of destruction and despair among fishermen, residents and businesses that depend on the pristine waters and beaches of the Gulf for a livelihood. From an economic, political and brand perspective, few corporate disasters in industrial history can match the situation in which BP finds itself.

However,BP, it turned out, was not unfamiliar with oil-related disasters. In 2005, at its Johnson City, Tex., oil refinery, an explosion killed 15 workers, an event later attributed at least partially to cost-cutting. In 2006, a BP oil pipeline ruptured and spilled more than 200,000 gallons of oil into Prudhoe Bay in Alaska. With such a track record, BP is receiving very little compassion from its critics.

One main reason for these accidents have been that the Managements performance in BP is judged on the basis of the Cost Cutting and reduction of maintenance a manager is able to bring about leading to complete ignorance of preventive measures.

The main consequences that BP faced after the oil spill have been-

1.Financial Consequences-

* BP had to pay a huge amount in fine to the Govt as a penalty .

* BP cut back on the dividend they pay to the people

* Precipitous