Case Study BP And The Deepwater Horizon Disaster Of 2010

Introduction: Case Study Bp And The Deepwater Horizon Disaster Of 2010

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British Petroleum (BP) is a well-known UK-based company which has its headquarters in London. The people of Mexico had seen a terrible disaster in 2010 that was caused by BP. The Gulf of Mexico witnessed the Deepwater Horizon oil rig explosion on 20th April of the previously mentioned year. The explosion immediately killed 11 people and 17 of the crew members were injured. The spilled oil started spreading into its surrounding water once the rig started capsizing two days later. Almost 206 million gallons of oil were released into the water within 3 months. This not only caused harm to the marine animals but also to the environment as a whole.

Reasons for the Deepwater Horizon Disaster

The deepwater horizon oil disaster is known as the biggest oil spill disaster in US waters so far. Many analysts have tried to investigate the cause of the disaster. The Macondo Well project failure mostly occurred due to management faults by the BP. The first problem occurred during the well-capping period. BP wanted to rush the project as the whole project was consuming a lot of time and they were behind the project deadline. They also wanted to complete the project in a more cost-efficient way as the project was going over the budget. As per the case study, Schlumberger workers were hired for performing the cement bond log process, however, BP instructed them to do nothing later for reducing the cost by up to 7%.

BP previously made two similar mistakes within one year as per the case study. The first explosion happened in 2005 where 15 people were killed and 180 people were injured in Texas City. However, BP did not learn from that mistake as they made the same mistake in the Gulf of Mexico (Ingersoll et al. 2012). The incident in 2005 occurred due to the cost-cutting in the budget for safety measures and maintenance in the project. The same problem occurred while loading the Deepwater Horizon in 2010. The cement could not seal the well properly so they used liquid nitrogen to seal the gap. However, the whole process actually weakened the holding capacity of the gas as it started spilling eventually.

The overconfidence regarding the necessary safety measures among the crew members is the main reason behind this seal leak. Deepwater Horizon had a clean track record from its first sailing period in seven years. It did not cause any sort of accident previously and therefore they thought it will not cause any problem during the natural gas loading as well. They did not estimate the increase in pressure into the rig that can occur due to the natural gas. BP a few months earlier gained the recognition of capping the deepest well in the world and this also boosted the overconfidence among them.

There were various tests done by the maritime workers for the verification of the proper functioning of the seal of the well. However, none of those tests were evaluated properly and therefore they thought the seal will not leak. The well sealing process also required the oil filling into the well from the rig with the help of the pipe and that too was built with cement. There were two valves within the pipe and these valves could stop the flow of the oil through the pipe if they detected any leak. However, during the leak, the valves did not work properly and the oil kept spilling into the gulf. The workers who were well trained for detecting any sort of leakage could not detect it on time. They felt an abnormal pressure change before the disaster and they neglected it as they thought the rig cannot leak.

The blowout preventer or BOP of the rig was not closing properly as its switch and battery were faulty. The BOP did not have any surface contact and therefore it did not start working automatically during the time of its explosion. Based on the case study, the secondary valve residing within the BOP is supposed to work automatically so that it can close the flow if any leak occurs. There has been an inbuild gas detection alarm in the Deepwater Horizon and it should have alarmed the crew members about the leaking. However, it failed to ring an alarm as the flammable gas reached its ignition point and caused the explosion.

Based on the case study, the natural gas loading in the rig was mixed with mud that was collected during the time of drilling. The mud circulation helps to pump the mud to the bottom and then again brings it back to the surface level (Schwacke et al. 2022). This procedure helps to remove any cutting of the rock while lubricating the bit. The well does not go through a lot of pressure due to this procedure since it can stabilize the well. However, BP skipped this whole process and as a result, it caused more harm to the well of the rig that was already weak previously.

Required Preventive Measures before the Explosion

The explosion could have been prevented easily if the safety measures were taken properly. The mud circulation process was done within 30 minutes. This decreased the effectiveness of the process and increased pressure on the well. The efficiency of the cement bond log was could have been protected if the Schlumberger workers were instructed to check them. The crew members should have been less confident about the accident occurrence by Deepwater Horizon. They should not have fixed the well with liquid nitrogen instead of cement. The main valves within the pipes and the second value within the BOP should have been checked properly by the workers to prevent any type of disturbance if the spill happens. The use of cement between the protective casing and the production casing was not sufficient and it created a hole in the well.

This issue should not have been overlooked as using the accurate cement amount is necessary for preventing any type of leakage. The maritime workers should have looked up the inefficient results regarding the sealing of the well instead of assuming that it will not leak. The trained workers should have detected the abnormal pressure change within the well as it was a clear indication of the leakage in it. The management of BP should have thought of the harm it can cause to the environment by not taking the safety measures properly instead of reducing the budget to complete the project. The project required 21 centralizers in total as per the computer model recommendation. However, they decided to opt for six centralizers only and this created the risk of unequal cement casing in the well. They should have released that the risk was too high and the technicians and workers should have protested about it.

The higher management could have realized the problem mostly and they should have talked with their subordinates. The workers and employees who were working on the project were closely associated with it (Frasier et al. 2020). However, they did not have the authority to bring any change as it was completely in the hands of the leaders. The leaders should have consulted with these workers and technicians so that they can understand where the change is necessary and they can bring those changes accordingly.

Based on the case study, not only BP was overseeing the Macondo project but also companies like Transocean, Anadarko, Cameron, Hyundai and Halliburton helped them. They should have stepped in when they suspected any sort of unethical activity performed by BP (Zengel et al. 2022). They should have understood the unspeakable amount of harm the leakage can cause.

Change in Company’s Culture

BP previously had various management positions during the 1980s and that created difficulty in the decision-making process. As per the case study, every proposal regarding bringing a change needed 15 signatures from the management (cdc.gov, 2022). It was highly affecting the productivity level of the company. The new CEO of BP, Robert Horton, started removing several management positions to make the whole decision-making procedure simpler. He also reduced the annual expenses of BP by almost $750 million (Martin et al. 2020). The change in management made the work process efficient within BP, but I feel that a few changes are required to prevent this type of disaster.

The first thing that is necessary is the commitment toward safety among the leaders. The top leaders need to understand what it means to carry out an operation securely (Stenzel et al. 2022). Communication regarding these safety measures is required from the CEO’s end. Once, the message is communicated to the department leaders it must be put into action. To gain additional knowledge about the required safety I would suggest the department leaders about brainstorming with the employees. The employees and workers are closely related to the actual procedure and therefore they know more about the bits and pieces of the machines.

Once the company learns about the concerns of the employees, it is necessary to take action on those points. I would be appointing the department leaders and guide them about the necessary changes. It is not enough to guide the leaders and employees about the required steps. There must be an auditing procedure for helping the increment of the safety measures. The audit team requires not only internal hires but also external hires, as the point-of-view of the external hires is also required about the efficiency when the company is trying to bring any change (Sandifer et al. 2021). There needs to be a proper protocol for assessing the proper safety measures that are required.

That cost-cutting BP did during the deepwater horizon accident was unethical. They must have used the required cost budget for carrying forward the project safely. However, they reduced the budget of the project so that they can complete the project at a lower cost (Arekhi et al. 2021). The cost cutting of the whole project made the project unsafe. I would be using the required cost for the safety measures and will balance the final cost with other areas in the organization where it is possible.

Reflection on the Incident

The management mostly decided to cut the cost of the mud circulation and cement bond log process. These two steps were the most important steps during this project they trickly decided to lower the budget by putting less effort into these two areas. This shows the unethical behaviour of the company toward the environment (Arnold et al. 2022). The minimum required time for the mud circulation was almost six hours but they conducted this process only for 30 minutes. Gagliano warned about the potential risks that it can cause, however, the management did not put much thought into it. This shows the irresponsibility of the management as well as their negligence toward the risk. Based on the case study, there has been an investigation committee organized for this incident and the committee asked for the testimony of BP’s Chief Executive Officer, Tony Hayward (Ainsworth et al. 2021). Tony Hayward, however, has mentioned his deep regret regarding this incident as this incident has caused significant harm to the environment and economy as well as for humans.

This whole incident teaches us that it is necessary to maintain the regulations related to the environment so that it does not cause any sort of harm to others. BP was penalized for paying almost $21 billion as a civil charge as well as a criminal charge. It also had to provide funding for additional research of almost $500 million. They were charged with violations of 11 rules from the 1838 Act. These violations also included the man slaughtering of seamen (Brakstad et al. 2018). It is also necessary to make a proper clean-up plan if the situation goes out of hand. BP took almost 3 months for cleaning up the oil spill that occurred in the Gulf of Mexico. The requirement of extra backup system is necessary so that the offshore wells get shut automatically.

The requirement of well capability relief in the same season is necessary. The petroleum company must highlight the viable systems for the deployment of the drilling (cdc.gov, 2022). The company must focus on safety measures and the necessary required expenses for proper drilling of the well. They must not think about the expenses it can cause to the budget and the company as it is a must-required need. The government also must charge meaningful penalties if any sort of deepwater spill occurs by the oil companies. The meaningful penalty here means that the amount of money should be huge enough for the private companies so that they take the required safety measures for the oil spill seriously (livescience.com, 2022). This falls under the Oil Pollution Act and the charged company has to provide $75 million for every oil spill incident. The comprehensive passage of energy legislation for reducing the dependency on fossil fuels needs to be developed.

Conclusion

The higher authorities of the Macondo well project had pointed fingers at each other. Nobody at fast wanted to take responsibility for the situation and the reasons that caused the situation. The three main factors for the decision to stop the project was related to the casing of the well, the total used centralizers and the stopping of the cement bond log process. These three reasons mainly caused the leakage of the well and caused harm to the environment. There has been a huge amount of financial harm to the US government as well as to BP. The problem occurred due to various decision-making errors throughout the whole project. The management of the project thought that it is necessary to reduce the cost so that the project does not go over budget. However, those costs were required for the successful completion of the project. The computer model had already estimated the related number of machines for the projects. The management and engineers, however, neglected those resulted and decided to do things their way so that the project stays within the budget.