Overview: British Petroleum, the worlds 3rd largest oil company and a leader in deep-water oil drilling caused one of the worst environmental oil disasters in America’s history. April 20,2012 marks the fateful day that a gas leak caused a subsequent explosion on the Deepwater Horizon oil rig in the Gulf of Mexico. The rig was running on the Mocondo well located 50 miles off the Louisiana coast, and was being leased from Transocean, a Swiss company. The disaster caused irreparable damage to the environment resulting from approximately 250 million gallons of oil leaking into the Gulf of Mexico; apart from the environment 11 workers lost their lives while another 17 were injured. The leakage of gas, which caused the explosion, was found to have …show more content…
Since the Deepwater Horizon was originally an exploratory vessel the crew aboard received orders to secure the well temporarily so they can return with another rig for oil extraction. BP had estimated that the Mocando well project budget around $96 million and 51 days to complete, however their estimation were dealt a huge blow, as a day before the disaster the rig was already on its 80th day with costs exceeding far over its estimated …show more content…
However this led to the management at BP to cut down on essential tests and ignore vital advice of operating in a very high-risk manner. As seen at deep water horizon the company had been cutting down by delaying and ignoring maintenance and safety precautions and even failed to conduct essential checks which lead to them not recognizing the brewing disaster. Although, cutting costs is essential for organizations to generate more profits however BP should not regard safety and maintenance as disposable issues in the future, rather they should find alternate ways of cutting down costs such as cheap raw materials and effective planning to meet deadlines. Cost estimation and budget formulation also needs to be revisited by BP, as oil rigging is a dangerous industry BP should have strong contingency plans in place so that when an issue arises they are already aware of what to do instead of trying to figure out how to control the