INTRODUCTION TO BP’S DISASTER

THE SITUATION

• What happened?

• Founded in 1909 as the Anglo-Persian Oil company.

• The third largest energy company in the world.

• The biggest corporation in the UK.

• London Stock Exchange and New York Stock Exchange,

• constituent of the FTSE 100 Index.

THE SITUATION

• Active in over 80 countries

• Has 16 refineries.

• 22400 service stations

• Selling about 5.9 million barrels per day.

• Until mid-eighties BP = British government.

• After the privatizing in the nineties BP occurred in several scandals.

THE SITUATION

• 1993 till 1995, convicted to pay a 22 million USD fine.

• 2005 explosion in BP’s refinery in Texas, result: 15 deaths and 180 injured.

• 2006 BP shuts down their oil operations in Prudhoe Bay

• corrosion in the pipelines, caused millions of liters of oil to be spilled.

THE SITUATION

• 20th of April 2010 at 10 o’clock an explosion occurred at the ‘Deepwater Horizon’.

• The explosion was enormous eleven people killed instantly

• It kept burning for two days, before it collapsed and sunk,

THE SITUATION

• Ripped apart the pipe system millions of litres of oil started leaking

• at about thousand meters below the surface.

• In the history books as one of the biggest oil pollutions.

THE SITUATION

• How could it get this far?

• Privatizing the companies’ culture changed.

• Profit hungry CEO’s want sales rates as high as possible!

• Deep-sea drilling a risky business

• BP built the ‘Deepwater Horizon’,

THE SITUATION

• a 32,000 ton colossal.

• operating in waters up to 2,400m deep .

• Can drill to a maximum depth of 9,100m.

• BP had 65% of the share

• Anadarko 25%

• Mitsui 10%.

THE SITUATION

• the Macondo project wasn’t the rig’s first operation.

• the inevitable happened.

• tempest of speculations and accusations.

• an Associated Press investigation the Bureau of Ocean Energy, had failed,

• Mid-August situation under control the final stages of sealing the well.

THE CONSEQUENCES

• How can we prevent this?

• Can it be justified that a high level executive cuts corners?

• management of a company responsible for ignoring standard safety measures ?

THE CONSEQUENCES

• Most acts of recklessness don’t result in fatalities.

• Similarity drunk driving or speeding.

• to keep the risky behaviour under control

• Code of conduct

• independent control unit,

THE CONSEQUENCES

• What is being done so far?

• European commission is putting the UK government under pressure to ban drilling in the North Sea;

• In the US, the House of Representatives legislation that will block BP from getting futuredrilling permits in the US.

• BP set aside 32.2bn USD to meet the cost of the clean-up.

THE CONSEQUENCES

• Currently 17bn USD loss

• Big concerns in the UK crucial part of the pension funds rests on BP dividends.

THE CONSEQUENCES

• BP has made a strategic move replaced CEO, Tony Hayward, by an American (Bob Dudley).

• prevent a ‘cold war’ situation UK vs. USA

Bob DudleyTony Hayward

THE CONSEQUENCES

• Tens of thousands of people are heading towards bankruptcy.

• Damage claims against BP rising exponentially.

• BP willing to pay a lump sum if agreed on not pursuing them in court.

THE CONSEQUENCES

• BP is feeling the heat .

• Started billing their partners, Anadarko and Mitsui, for the clean-up costs.

• None of them is willing to pay unless investigations.

• BP reacted offensive willing to take legal actions .

THE CONSEQUENCES

• Latest calculations estimate 4.9 million barrels of oil have leaked into the waters of the Gulf.

• One barrel contains approximately 159 litres.

THE CONSEQUENCES

• Reports say that 65% of the spill is already been dealt with.

• With more than one million barrels of oil still left in the sea,

• the impact on fish and shrimp will strike the local economies.

CONCLUSION

• The BP story shackle in the chain of events leading up to a conclusion we should have made many years ago.

• Isn’t it dangerous that big multinational companies have more power than an average country?

• This cannot go on forever!

• Lessons should be learned,

• Consequences should be given!

Thank you for listening.