The Oil Spill Disaster Exposed The Major Factors in BP’s External Environment

Examination of BP

BP was formed in 1909 and has grown into a global energy giant. BP’s revenues place it as the fifth largest company in the world and they operate in all facets of the oil and gas energy industry. BP is headquartered in London and has operations in nearly 80 countries around the world. BP operates in many countries for the exploration, extraction, refining, distribution, energy generation, and renewable energy projects. BP has oil drilling projects all over the United States and operates heavily in the Gulf Coast. BP owns 4 major drilling platforms in the gulf and produces over 200,000 barrels of oil a day from the region.

On April 20th, 2010, BP was operating an offshore exploratory rig named “Deep Horizon” and there was a massive explosion that killed 11 people and injured 16 others. The oil rig sank into the Gulf and continued to dump oil into the waters until July 15th, 2010. This oil spill was the largest oil spill in history, dumping nearly 5 million barrels of oil into the Gulf of Mexico. The damage to the United States coast was extensive and impacted the environment and the economy. BP is structured as a corporation and as such, was treated as its own legal entity.

The oil spill disaster exposed the major factors in BP’s external environment. Those key factors are government regulation and shareholders. The reason that government regulation is such an important external factor for BP is because those regulations can decide the economic feasibility of projects and the related penalties for violations. Had BP been aware that it would be assessed nearly $18 billion in penalties related to regulation violations, they may have decided to comply or possibly not drill in the Gulf Coast region. However, BP ...

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...ith the complex city of implementation, I would recommend hiring a consultant that specializes in implementation of responsibility and ethics training. This would reduce the amount of time necessary and ensure a smooth handoff back to the organization.

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References

Energy and Climate Change Committee. (2011). UK deepwater drilling - implications of the Gulf of Mexico oil spill (2nd ed., Vol. 1). London, UK: The Stationary Office Limited.

Ferrell, O. C., & Hartline, M. (2012). Marketing strategy, text and cases (6th ed.). Stamford, CT: Cengage Learning.

Ahmad, J., & Hartline, D. C. (2013). Education and corporate social responsibility: International perspectives (Vol. 4). Bingley, UK: Emerald Group Publishing.

Lustgarten, A. (2012). Run to failure: BP and the making of the Deepwater Horizon disaster. New York, NY: W. W. Norton & Company.