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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"BP has systemic safety and health problems. They need to take their intentions and apply them much more effectively on the ground, where the hazards actually lie."¹

- Jordan Barab, deputy assistant secretary of labor, OSHA², in 2010.

"We are a responsible and professional company. We work to high standards. Safety is our highest priority."³

- Steve Rinehart, BP spokesman in Alaska, in 2010.

Yet another Disaster at BP

On April 20, 2010, an explosion aboard the drilling rig Deepwater Horizon⁴, leased by the British oil company BP Plc (BP) in the Gulf of Mexico, left 11 workers missing and 17 injured. Two days later, oil began leaking from the broken pipes of the rig, which sank about 50 miles off the Louisiana coast. According to investigators, an estimated 5,000 barrels (210,000 gallons) of oil per day had been leaking from the well since then, endangering wildlife, leading to the suspension of commercial fishing, and affecting coastal tourism in Louisiana, Mississippi, Alabama, and Florida states in the US.

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1] Jad Mouawad, "For BP, a History of Spills and Safety Lapses," www.nytimes.com, May 8, 2010.

2] The US Occupational Safety and Health Administration (OSHA) is an agency of the US Department of Labor. OSHA's mission is to prevent work-related injuries, illnesses, and deaths by issuing and enforcing rules for workplace safety and health.

3] Richard Mauer, "BP has a History of Safety Failures," www.adn.com, May 8, 2010.

4] Built in 2001 in South Korea, The Deepwater Horizon is one of the world's most advanced deepwater, semi-submersible offshore drilling rigs. The rig was leased to BP by Transocean Ltd. for exploration in the Gulf of Mexico until September 2013 at a daily rate of about US$ 500,000. The rig arrived in the Gulf of Mexico in February 2010.

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