Assessing & Analyzing the Impact of the British Petroleum (BP) Essay

Assessing & Analyzing the Impact of the British Petroleum (BP) Deepwater Horizon Oil Spill in the Gulf of Mexico - Essay Example is a petroleum manufacturing company which was founded in the year 1889. It is a London based company and is one of the largest companies in the world. It is engaged in the business of exploration of oil and petroleum and manufacturing of various petroleum products. BP is vertically integrated and is engaged in all allied business activities related to the oil and gas industry (Yahoo Finance, 2012). It is a multinational company and its shares are traded in the New York Stock Exchange (NYSE) and London Stock Exchange (LSE) with the ticker symbol â€Å"BP†. BP is associated with a rich history and has achieved numerous landmarks on its way to become a large multinational company as it stands today. BP is committed towards becoming the industry leader and maximising the wealth of its shareholders through energy supply to its customers in a responsible and safe manner. The business segments of BP are primarily two, namely a) the oil exploration and manufacturing unit, and b) the marketing and refining business unit. Recently BP has engaged itself in exploring sources of renewable energies as well. The recent tragic incident involving the Gulf of Mexico oil spill had a significant negative impact on BP and the company has taken several strategic initiatives to restore its reputation in the market. Gulf of Mexico Oil Spill The Gulf of Mexico oil spill incident took place on April 20, 2012. It is regarded as one of the largest disastrous event corresponding to the petroleum industry history. The incident took place at Deepwater Horizon, which is a semi-submersible rig meant for oil drilling and situated offshore in the Gulf of Mexico. An explosion occurred which set the oil rig on fire and 11 crewmen were found dead. Several other workers working there were injured. The explosion took place while the oil drilling was on at a water depth of around 1500 m and BP was the principle operator of this project. The explosion occurred because of the ignition of methane gas in the drilling rig which expanded into the rig due to high pressure exerted by the methane gas. Later on after this mishap, oil leak was found which began to spread at a fast rate. According to the reports of Flow Rate Technical Group, the leak resulted in spilling out of oil amounting to around 4,900,000 barrels of oil. The resulting oil spill quickly spread over a large area of water covering around 1,500 square kilometres. After considerable efforts the wellhead was successfully capped on July 15, 2010. A commission was set up by the US government to investigate on the reasons behind the explosion and oil spill which released its final report on January 5, 2011. According to this report several faults were identified on the part of BP which led to the occurrence of this disastrous event. They were mainly accused of making an attempt to work on the project at cheap rate that resulted in the explosion and oil leakage. One of such fault detected was that BP did not make use of any diagnostic tool which could have the ability to test for the tensile strength of the cement used to build the rig. Another major fault in the part of BP was that it ignored the pressure test which indicated negative results. In addition to this BP did not make any effort to plug the pipe with the help of cement. Hence all these facts suggest that BP was primarily responsible for the oil spill at Deepwater Hori