ORGANIZATION

British Petroleum



British Petroleum

Introduction

The BP oil spill in 2010, also known as the Deepwater Horizon oil spill was the biggest oil disasters in the world. The reason for this oil spill was a blowout at the rig which caused oil to escape from the ea flow to the surface continuously for three months. The effects of this spill were severe which affected the biodiversity and business in the region. It is estimated that around 4.9 billion barrels of oil had escaped during the three months before it was capped. Although the well was capped and declared closed, there have been continuous sightings of oil that might still be leaking into the sea (British Petroleum, Annual Report 2010-11).

The oil spill badly affected the environment and wildlife. Ships could not venture out to fish as the surface of the water was filled with a thick layer of oil. Life came to a standstill for people whose earnings depended on the fishing industry. In order to protect the beaches, barricades filled with sand were used to block the shoreline in order to avoid the oil affecting the shoreline. Corexit dispersant was also used to protect estuaries, wetlands, and beaches.

Research showed that apart from the oil that was visible on the surface, there were oil fumes underwater that were not visible on the surface. The cost of this disaster summed up to several billion dollars while the economic effects could not be determined. After the spill, BP was forbidden to participate in various contracts in the US without paying all the claimants.

Key Issues

The effects of the oil spill were disastrous and resulted in loss of aquatic animals and business worth several billion dollars. This oil spill is the largest in history and resulted in oil leaking out into the sea for three consecutive months. In fact, recent observations of oil show that there is still some oil leaking out from some places. This oil leak is happening despite the well being closed and declared closed.

The loss of business and the environment resulted in several people going to court in order to claim compensation for the loss they had to face. The total claims totalled $20 billion with several more people still about to go to court. This fine is the largest in history because the loss was enormous.

Although the case was still in court, it was evident that BP will lose it and will therefore have to pay the compensation. Due to the amount to be paid, BP devised a strategy whereby they wished to delay the cases as much as possible. According to them, as time passes, it is possible that the cases would be dropped or some consensus may be reached that would benefit BP.

On the other hand, claimants were pressing for the case to be resolved as soon as possible since they had to cover their losses. Almost all the claimants went straight to the court to seek compensation. BP claimed that in before going to court, the claimants should ...