"Drilling Safety at BP: The Deepwater Horizon Accident" case study focuses on BP's safety record, practices, and management culture in relation to the 2010 Gulf of Mexico explosion and oil spill.
Stephen P. Kaufman; Laura Winig
Harvard Business Review (611017-PDF-ENG)
October 14, 2010
Case questions answered:
- Provide a critical summary of the incident and how it occurred.
- How did the organization react during the incident?
- Provide recommendations to leaders on how to prevent such accidents in the future.
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Drilling Safety at BP: The Deepwater Horizon Accident Case Answers
Crisis Analysis – BP Deepwater Horizon Gulf of Mexico oil spill
In the life of an organization, several crises can take place. Issues and crises can affect any organization, which, in some cases, allows for necessary transformations or adjustments to the organizational behavior or culture.
When a crisis occurs, organizations learn by conducting a detailed analysis or review of how the incident took place, its causes, the response of the organization, and how they can prevent such a crisis from happening in the future.
One of the crises that have taken place and been handled is what is known now as the Deepwater Horizon Gulf of Mexico Accident concerning the drilling safety at BP.
Crisis Summary and Timeline
The BP Oil Spill is the biggest oil spill in the records of the United States. The discharge came from a blast on the oil rig in the Gulf of Mexico. The blast, which took place on April 20, 2010, led to the loss of 11 lives, injuring 17 people, and the discharge of millions of crude oil barrels into the Gulf (Harlow, Brantley & Harlow, 2014).
The incident caused one of the worst environmental disasters in America. For the 87 days that the incident lasted, reports indicate that the nation watched as several approaches to cover the flowing Macondo well collapsed (Barron 317).
According to BBC News (2011), the outcome of this catastrophe comprised the terrible loss of employees’ lives, damage to several residents of the Gulf Coast, and an economic and ecological calamity that is still revealing even today. The full extent of the damage caused by the oil spill cannot be gauged right now because the impact will last for several generations.
Aside from the loss of lives, another significant impact of the oil spill incident was environmental damage. The BP oil spill placed a lot of pressure on the firm to mitigate its impacts on the drilling process (Lubchenco et al., 2014). At the same time, the company had to deal with substantial negative publicity for several years and months following the spill. They made settlements that turned out to be the biggest environmental settlement in US history.
Osofsky (2015) states that the incident ruined the tourism and fishing industries of the Gulf Coast regions and led to the death of a large number of marine creatures and seabirds and some of the species that were endangered. The oil spill severely disrupted the financial performance of BP and its stock prices as the news regarding the extent of the disaster continued to spread.
According to BP, certain disastrous failures led to the explosion that caused one of the biggest oil leaks in history. BP accepted that there was poor management from its leadership. The day prior to the explosion, the crew working at the oil drill had propelled cement to the base of the borehole as a basic process of preventing oil leakage (Balmer, Powell & Greyser, 2015). When the accident occurred, the team was performing checks to establish whether the well was well sealed.
BP says that the cause of the accident came as a result of the failure of various safety systems. They argue that the cement placed at the base of the borehole failed to develop a seal, allowing gas and oil to begin leaking through the pipe and up to the surface. The formulation of cement was not correctly done. Another cause was the failure of a valve (Norse & Amos, 2015).
The base of the pipe was filled with cement and had two mechanical valves put in place to prevent gas and oil flow. These valves, however, failed, allowing the gas and oil to flow up to the rig. It is important to note that the team conducted several pressure tests to establish whether the well was properly sealed, but the result of the test was misconstrued, making them think that the well was in good condition (Lee & Blanchard, 2014).
The crew also could not spot the flow of gas and oil toward the surface, as was shown by the sudden pressure increase. This took place approximately 50 minutes prior to the rig’s explosion. Around 8 minutes before the explosion, a combination of gas and mud started flowing towards the rig’s floor. The crew immediately tried to close the blowout preventer valve located on the floor of the ocean on top of the well’s borehole, but it failed to prevent the flow (Balmer, 2015).
The crew had an alternative of averting the mud and gas far from the rig to safely vent it through the pipes over the side. But the flood was rather diverted to a gadget onboard meant to split small volumes of gas from a flow of mud. The mud-gas separator was immediately overpowered by the flow, and flammable gas started engulfing the rig (Starbird et al., 2015).
The rig contained a gas detection system designed to sound an alarm to trigger the shutdown of the ventilation fans and avert the gas from igniting. But the alarm system failed. The explosion affected the control lines used by the crew to try closing the safety valves in the blowout preventer. The blowout preventer had a different safety device, and two separate safety systems should have automatically closed the valves when there was no contact from the top (Michel et al., 2016). One of the systems had a flat battery, but the other had a defective switch. As a result, the blowout preventer…
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