Potential Economic Impact Of The Deepwater Horizon Blowout On The Organizations

Introduction

The Deepwater Horizon oil spill (also known as the Gulf of Mexico Oil Spill or the BP Oil Spill) is the largest marine oil spill in history, and was caused by an explosion on the Deepwater Horizon offshore oil platform about 50 miles southeast of the Mississippi River delta on April 20, 2010 (28.74°N, 88.39°W). Most of the 126 workers on the platform were safely evacuated, and a search and rescue operation began for 11 missing workers. The Deepwater Horizon sank in about 5,000 feet (1,500 m) of water on April 22, 2010. On April 23 the U.S. Coast Guard suspended the search for missing workers who are all presumed dead. After a series of failed efforts to plug the leak, BP said on July 15 that it had capped the well, stopping the flow of oil into the Gulf of Mexico for the first time in 86 days. BP was principal developer of the Macondo Prospect oil field where the accident occurred. The Deepwater Horizon, owned by Transocean Ltd., was under a contract with BP to drill an exploratory well. BP was the lessee and principal developer of the Macondo Prospect oil field in which the rig was operating. At the time of the explosion, BP and Transocean were in the process of closing the well in anticipation of later production. Halliburton had recently completed cementing of casings in the well. The U.S. Government has named BP as the responsible party in the incident and will hold the company accountable for all cleanup costs resulting from the oil spill. BP has accepted responsibility for the oil spill and the cleanup costs but indicated that the accident was not their fault as the rig was run by Transocean personnel. 

Economic Impact Of The Spill

The oil spill currently affecting the Gulf of Mexico has the potential to cause enormous economic damage especially in the oil, fishing and tourism sectors.

The ongoing oil spill in the Gulf of Mexico has attracted extensive publicity for its environmental impacts : on his visit to the area on 2 May 2010, President Obama described the incident as a 'massive environmental disaster'. The impacts of the leak are economic as well as environmental and are likely to range across the regional, and possibly even the global, economy.

As the spill continues to spread, it isn't yet possible to count the full economic cost of the disaster, although the Daily Telegraph quotes a study by the Harte Research Institute in Texas as estimating a figure of around $1.6 billion in loss of economic activity. The oil industry is a major loser, but regional tourism and fishing industries will also be badly hit.

The whole of the Mexican Gulf coastline is an attraction to tourists. Wetlands attract those with an environmental interest, beaches attract sun-worshippers and the coast offers widespread opportunities for active sports. All of these are threatened by the spread of the oil as it comes coser to making landfall along the ...