BU310 Fundamentals of Management Assignment 8

  • Uncategorized

BU310Fundamentals of Management Assignment 8

BU310Fundamentals of Management Assignment 8

1.Outline of the proceedings and repercussions of the oil spill withinthe Mexican Gulf.

Thebiggest unintended marine oil slick in the history of humanityoccurred in the Gulf of Mexico in the year 2010. The event came aboutafter the discharge and blasting of methane gas from the explorationwell owned by BP. This occurred on Apr 20, 2010. The fire proceededfor 36 hours and the apparatus used for drilling oil (DeepwaterHorizon) sank on Apr 22. This occurrence led to the death of elevenindividuals and the spillage of a large amount of oil projected to bearound 4.9 million barrels. The affected area was around sixty-eightthousand square miles. After broad endeavors, the well was cappedafter eighty-seven days (on 15 July 2010) and on 19 September 2010,it was sealed.

BPimmediately initiated regulation and remediation mechanisms so as torecompense for the whole effort. The primary objective was to sealthe well thereby halting the spread of oil on water, into the sea andonto the shorelines. At its crest, forty-eight thousand individualsand sixty-five thousand vessels were incorporated towards the effort.Among the regulation and control measures, the utilization of amanagement boom, controlled ignition, and Corexit dispersant were themost utilized. Regardless of these efforts, it has been assessed thataround 75% of the oil slick is still unaccounted. April 2014 markedthe end of the clean-up efforts.

Thespill contributed to financial and ecological issues. BP has spentjust about fourteen billion dollars on clean-up and responseactivities. Extra cleanup expenses might be required later on, andthe organization may have to pay fines, costing a few more billionsof dollars. Moreover, BP has been briefly banned from looking for newcontracts with the government. Due to this extreme cost, the eventualfate of organization is doubtful. The economic downturn has alsoaffected the residents due to the halt in drilling and explorationactivities. Additionally, fishing has also been banned. Amongecological effects, marine animals are the most affected.

Lesionshave been detected thereby leading to the high rate of distorted fishand other aquatic life forms. Dolphins have additionally beenaffected, and expanded mortality of newborn dolphins have been noted.The oil slick has affected a vast zone and has been washed onto theshorelines too.

2.The Oil Pollution Act of 1990,

Thisact was authorized in 1990 in light of the Exxon-Valdez oil slick asit was felt that better-organized strategies could have minimized theharm furthermore reduced the standard risk of any future spills. Somemajor provisions within the act included

  • Organization obligation regarding the coordination of spill cleanup endeavors the Coast Guard is in charge of planning seaward cleanup, while the Environmental Protection Agency is in charge of on-shore cleanup.

  • Better readiness to prevent oil spills through proper planning.

  • Liability: the proprietor will be subject for all the tidy up expenses. The financial estimates for the clean-up exercise may be incurred by a third party if shown to be responsible.

  • The liability limit: the responsible party may be charged up to $350 million as the liability costs. However, the government has powers to adjust this limit.

  • The ban of any vessel that has led to a spill of more than one million gallons in any marine region from accessing Prince William Sound.

  • Tankers with capacities of more than five thousand tons are banned.

Thisact can prevent some of the smaller spills. A case in considerationis the efficiency of double-hull tankers which are four to six timesless likely to cause an oil spill if they are grounded or bump intoeach other. They also have a lower flow rate (four to six times less)in comparison to single hull tankers.

Inany case, it couldn`t contain the biggest marine oil slick in theGulf of Mexico in 2010. Keep in mind that the act is more forregulating spills than a blowout, and henceforth its applicability inthis situation is flawed as is the $350 million damage fine.

3.Reason for the lengthy period taken by BP to halt the spill

Thenumber of days taken by BP to cover the well was eighty-seven and afew more months to seal it. The prolonged duration taken by BP wascaused by technical hitches and an incorrect estimation of the slick.According to Griggs (2011), the clean-up exercise was hindered by thelack of capability to stop the flow of oil. This occurred even thoughthere was an established contingency plan. One of the requirementsfor offshore drilling companies is to have a response plan in case ofan oil spill so as to have an immediate containment strategy. Theresponse plan for BP was entirely inadequate.

Besidesthe point above, it is critical to note that working in the remoteparts of the ocean is similar to working in the space environmentit`s a hard place to access, an uncomfortable place to move, andsubject to overwhelming laws of physics. It`s a spot that representsa portion of the difficulties that space travelers and operators ofrobotics face in space.

BPinitially attempted to utilize robots to close the preventer valves,yet it didn`t work. Next to be utilized was a one hundred andtwenty-five-ton control dome, which did not work in deep water andmethane hydrate crystals obstructed the dome opening. Additionally,the oil discharge could not be stopped by heavy drilling liquids orcement. The well was finally sealed through a combination of mud,insertion tubes, concrete, relief wells, and cap. BP likewisemistakenly evaluated the spill to be around five thousand barrels forevery day against the estimate by the government which was sixty-twothousand barrels a day. This prompted delays in the successful fixingof the well.

4.Critical control measure in preventing the oil spill

The&quotDeepwater Horizon&quot oil slick could have been prevented byBP by putting different managerial controls within the organizationalhierarchy and additionally the oil rig operational level. Theessential control that would have helped in avoiding the incident isa functional aspect of management called &quotfeedforward&quotcontrol. The feedforward control guarantees that issues are stoppedbefore they transpire by creating and authorizing standards andsystems aimed at preventing safety accidents. Additionally, thismethod intends to prepare and retrain all staff so as to facilitatethe appropriate use of equipment in the most secure conceivable way(Gomez-Mejia and Balkin, 2012). It is hard, expensive and unsafe torepair or supplant a broken pipeline that is submerged five thousandfeet in water. This necessitates the incorporation of the feedforwardcontrol framework as the best preventive measure, hence the need toeducate BP`s petroleum architects on its unprecedented benefits. Themain aim was to plan a preventer system (shut off type) to accentuatethe reliability of the pipeline, thereby empowering BP to preventsuch an incident from happening (Gomez-Mejia and Balkin, 2012).

Signshave shown that the disaster could have been evaded. A White Housereport focusing on the oil spill demonstrated that before theincident, surprising results were obtained following an essentialnegative pressure assessment in the rig. Nonetheless, the personnelat the site did not consult with the inspecting engineer at the rignor even engineers who were based on-shore. The assessment outcomeswere misinterpreted and work continued after being abandoned for awhile. It is alleged that an intercession by then could have avertedthe tragedy. The report likewise expressed that due to Halliburton`scommon problems, BP ought to have initiated measures against asimilar eventuality. The cement formulation by Halliburton`s aimed tohalt the movement of oil and gas its non-functionality led to theemergence of concerns regarding the competency of Haliburton(Halliburton has consented to pay $1.1 billion as a result of thedamages). If measures had been initiated at the appropriate time, BPcould have averted this disaster.


Gomez-Mejia,L. R., &amp Balkin, D. B. (2012). Management– People / Performance / Change.(S. Yagan, &amp E. Svendsen, Eds.) Upper Saddle River, New Jersey:Prentice Hall.

Griggs,J. W. (2011). BP Gulf of Mexico oil spill. EnergyLaw Journal,32.1,57-79. Retrieved fromhttp://search.proquest.com/docview/869071045/DE695F0D41464084PQ/20?accountid=45844

Close Menu