BP's Continuing Safety Problems: The Gulf of Mexico Crisis

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Case Details:

Case Code : BECG116
Case Length : 19 Pages
Period : 2005-2010
Organization : BP
Pub Date : 2010
Teaching Note : Not Available
Countries : India
Industry : Petroleum

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Background Note

The origin of BP can be traced back to 1901, when William Knox D'Arcy (D'Arcy), an Englishman, obtained a concession from the Shah of Persia to explore oil in the Middle East. When D'Arcy failed to locate any oil deposits despite having incurred huge costs on his explorations, the Burmah Oil Company came to his rescue in 1905 and supplied funds in return for operational control...

Safety Issues in the US

BP was plagued by safety lapses and found itself at the center of several of the worst oil and gas tragedies in the US which occurred between 2005 and 2009. According to investigators, during these years, the company broke many US environmental and safety laws and paid about US$ 373 million in fines to avoid prosecution.

According to the Center for Public Integrity, from 2006 to 2009, BP refineries in Ohio and Texas accounted for 97% of the safety violations pointed out by OSHA...

The Gulf of Mexico Disaster

On April 20, 2010, an explosion occurred on the Deepwater Horizon oil drilling rig in the Gulf of Mexico. Eleven workers were feared dead and fifteen were injured. At the time of the explosion, 126 people were on board. Two days later, the rig sank 5,000 feet to the ocean floor. Since then, at least 210,000 gallons of oil a day leaked out into the Gulf due to a severed underwater line...

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