Posted: October 17th, 2013
Review of the BP sustainability review of 2009
In January of 2011, the commission on the BP oil spill from the White House released their report on the final cause of the spill. The report exposed BP and its associates who made a series of budget-cutting decisions and a poor system of ensuring safety in the exploration process. The investigation revealed that the oil spill was the result of careless officials who displayed the lack of reform in the industry’s practices. By September, Washington had produced the final report that identified the cause of the spill as the faulty cementing at the rig while placing blame on BP, Halliburton and Transocean.
The decision to blame the oil company for the spill was justified because the BP management was aware of the dismal state in which they were running the oil exploration process. The report mentioned a case in which a BP engineer was arrested with allegations of tampering with evidence that showed the irregularity in the oil flow rate. BP was also accused by wildlife and environmental conservancy groups of withholding information concerning the extent of the oil spill. Within their sustainability review of 2009, BP indicated that it had a “no accidents, no harm to people and no damage to the environment” goal that was seriously violated by the company itself as it operated unsafe premises at the heart of a major water body.
In the investigations, BP had, on numerous occasions, made riskier decisions to lower their expenditure and time that went against the advice of the contractors. Halliburton energy representatives testified that the cementing procedure and the blowout preventer had not been fully serviced which led to their failure. Some of the other errors included the shear power site that had signs of leaks in the hydraulic system. The cheapest option selected by BP included the blowout preventer that was installed which was different from that in the schematic diagrams. These and other technical cost-cutting decisions were responsible for the oil spill.
Annual Report and Form 20-F2010 criticism
The BP management came under fire after the Gulf of Mexico spill for being negligent of such an obvious risk. The safety systems within the rig were not as safe as they were though to be mainly because BP invested very little in disaster management. The BP Company did not invest in remote control shut-off switches that would have used as the last option. Although it was not a requirement by the Mineral Management Service, BP had not invested in disaster aversion options. The awarding of the tender to Transocean was a poor management move as the company had a high rate of offshore drilling rig incidents. Even at the time of the explosion at the rig, by agreeing to enter into business with such a company, BP had made a cheap but detrimental choice.
BP made the decision to neglect the pending disaster that was happening within its own premises because of the cheap, inefficient materials that were installed at the rig. One of the technicians at Deepwater Horizon Oil testified that BP knew about the leaking blowout preventer, weeks before the disaster but continued production. Other employees in separate cases testified that BP had cut short the safety and standards inspection on the rig that were meant to determine if it was safe to operate. The biggest accusations against BP was that their decision to use a cheaper design that was cheaper to install and maintain. While the design was not primarily responsible for the explosion, it contributed towards the vulnerability of the oil well.
BP argued that they did not violate any laws while selecting their design but they ignored other safer options that would have averted or mitigated the oil spill. BP has operated in America and other countries for many years in which they have experienced many oil catastrophes that mirrored the Gulf oil spill. For a company of this magnitude and experience, the management of BP risk system was poorly handled. Putting financial priorities before the safety of the immediate environment and the global consequences was an approach that cost BP expensively.
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