BP Deepwater Horizon Oil Spill-April

BP Deepwater Horizon Oil Spill-April 2010

Oil Spill Report

Marketing and advertising strategies are used in various fields, not just in promoting products and services. Such techniques are developed and implemented in order to communicate political messages, to influence the election process, to create or to conceal scandals, and others. Advertising is used in attracting attention on something, or on distracting it from something else. This tool is thought to be so efficient, that even bad publicity is considered good publicity. The art and science of marketing have been perfected in time, and have become able to significantly influence the success of most companies.

An example in this direction is represented by the BP oil spill that impacted a series of stakeholders. The importance and the repercussion of the oil spill that took place in 2010 led to numerous side scandals. These scandals developed between the authorities and BP, between the companies involved in the activity that led to the spill, and between the public and the oil industry.

This situation determined numerous discussions between the companies involved and the authorities, in the attempt to identifying the share of guilt in each of these companies' case. The solutions that could stop the oil spill were the subject of even more intense sessions. The discussions regarding finding possible solutions that could help reduce the oil spill involved companies in the field, authorities in several countries, nonprofit organizations, the public, and even celebrities that provided ideas and financial resources intended to help seal the well.

The crisis that affected numerous stakeholders and its management by BP were the subject of various analyses. In such cases, communication is extremely important in dealing with these situations, in communicating the causes of the problem, its implications, and strategies that could be used in managing the situation. The communication evaluation in this case determined certain specialists to state that BP was unable to properly handle the communication required by this scandal. The crisis management of BP in this situation is presented in the following pages.

BP Situation Management

British Petroleum was pointed the finger at when authorities tried to find the company responsible for this situation. Therefore, it was only natural that BP was supposed to deal with the consequences and try to handle the situation. Although BP was harshly criticized for its crisis management, for its practices that led to the oil spill, and for the fact that the company did not seem to be prepared for such situations, BP presented its plans that revealed the company was actually prepared for even significantly larger situations.

The permit applications for drilling that BP filed for its activity in the Gulf of Mexico contained an oil spill response plan that proved on theoretical level that the company was able to handle a ten times larger oil spill than that that took place. The plan detailed the procedures that the company was supposed to apply in such cases in order to reduce environmental and ecological damage, to the areas or facilities of the company that might be affected by petroleum release. The differences between their plan and the actual manner in which the company handled the situation reveal the fact that BP overestimated its possibilities (Fitzgerald, 2010).

The plan that BP was obliged to provide the Mineral Management service stated a maximum amount of oil that could be released through the company's well. The fact that this amount was exceeded, shows that BP also failed to correctly assess the problems that might emerge during its drilling in the Gulf. Given the fact that the amount of oil was underestimated, it was obvious that the company's response plan to such a disaster was not properly developed.

The problem in this situation is that the company's response plan, with all its details, analyses, assessment, expectations, was posted on the Minerals Management Service website. This way, the company's plans were made entirely public, and anyone interested in the subject could see it and evaluate the plan. This significantly interfered with BP's communication strategy, because it made it difficult for the company to explain its position, and to direct some of the blame attributed to the company in other directions.

Even more, in its initial plans that were somehow made public, BP stated that it was able to handle 60 times the gallons of oil spilled per day in the Gulf. Regarding the actual handling of the spill, it seems that BP was not truthful to the authorities and to the public. In May 2010, BP said its response efforts maintained and then reduced the size of the spill. But satellite images of the area revealed that the spill had increased in fact, and has approximately doubled its size. However, the company refused to respond to these allegations and to comment on the images obtained by the NASA satellites.

Further analyses also revealed that BP's response plan did not contain information on how potential oil spills could actually be remediated. All the plan stated was that BP committed to assemble a team of technical experts that were supposed to respond to the situation. However, the plan provided some details about the methods that were supposed to be used at the surface. From the lack of details in the response plan, some people had the impression that BP did not properly handle the situation (Raines, 2010).

Although the company's response plan stated that the company could handle even greater oil spills, Tony Hayward, BP's former chief executive that clearly admitted the company was not prepare for such a disaster. Hayward said that BP did not develop a comprehensive contingency plan intended to address this situation (Empowered News, 2010). However, Hayward also admits that the engineering involved in the response activity was quite extraordinary, but its impact was affected by the continuous media attention that completely transformed it into incompetence.

Hayward also provides an interesting approach to BP's manner of handling the situation. He says that the crisis was actually a financial one, because the company was unable to borrow in the capital markets. This significantly affected the company's ability to manage the situation. In addition to this, Hayward also admits that, regarding the communication strategy, BP was not prepared to deal with the media attention. Hayward's explanations were dismissed by drilling experts and competitors that disapproved with the company's well designs and with its actions in response to the rig explosion.

Crisis Management Ingredients

As Ralph Tench and Liz Yeomans state in their book, crisis management is different in many situations and must be adapted in accordance with several characteristics and factors that influence the situation in case. However, crisis pmanagement must take into consideration certain ingredients that are considered extremely important in addressed crises and conflicts. These ingredients refer to knowledge, preparation, calmness, control, and communication. These factors are further analyzed in relationship with BP's situation.

Regarding knowledge, there are some mixed signals about BP's expertise in handling the oil spill. For example, the response plan developed and submitted by the company to the authorities assumed that BP was able to handle even greater situations than what occurred in the Gulf. The plan even provided scenarios that were intended to prove its abilities in this direction. However, the same plan failed at providing and explaining the actual strategies, methods, and actions that BP was ready to implement kin such cases. Therefore, even if the company had the knowledge required by this situation, it failed to demonstrate it.

Tony Hayward, the former CEO of BP accused the media of diminishing the importance of the measures taken by BP and its efforts in the attempt to stop or reduce the oil spill. Hayward said that the actions involved in BP's response strategy relied on innovative engineering that the public did not understand, also because of the manner in which the media scrutinized the situation. Hayward's accusations do not stop here, as he points the finger at the media for providing inaccurate information on the oil spill and BP.

The company's preparation for this situation is also ambiguous. This is because the company seemed prepared on paper, but the practice revealed otherwise. Although BP wanted to make a good impression on the authorities and the public, by presenting a detailed response plan, its application led to the opposite impression. The manner in which BP handled the situation reveals that BP was not really prepared to deal with such an oil spill.

However, it is important to analyze possible reasons that determined BP's lack of sufficient preparation. The lack of preparation can be attributed to the company's experience in the field and quality of its employees and activities that made it doubtable that such a disaster might take place during BP's expeditions. In addition to this, the company worked with Transocean and Halliburton at the Gulf oil rig. BP thoroughly assessed and analyzed these companies' activity, in order to reduce the risks of them leading to explosions or other underwater events.

The calmness that BP showed during the crisis cannot be contested. However, this calmness did not translate into crisis management success. Although BP seemed to not be significantly affected by the situation, Hayward stated that the company was overwhelmed by the media attention. The former CEO blames the press for the image that the public has formed on the company in response to its handling of the situation.

The control that the company was supposed to reveal did not match the intensity of the crisis. BP did not show that it fully controlled the situation. The fact that the company tried to share the blame with the rig owner and the drilling company reveals the fact that the company was not in control of the situation. The numerous attempts and strategies that the company developed and implemented in order to stop or reduce the oil spill also prove the lack of control from BP.

The lack of control showed by BP can also be attributed to the fact that the company did not develop an accurate, detailed response plan to potential oil spills, as the regulations required it. If the company would have had a thorough plan to rely on, it is likely that its control might have been improved. In addition to this, the fact that BP had no suitable strategies for such situations led to the reduced control of BP.

The communication strategy established by BP in order to handle the oil spill situation was a defective one. With the proper communication strategy, BP would have been able to take advantage of the situation and reduce some of the image damages that this situation determined. Instead, the company was affected by not being able to handle the oil spill from a technical and communicational point-of-view.

Strategic Opportunities

BP had several opportunities it could have exploited with the suitable communication strategy. For example, the company should have taken charged of the situation from the beginning, instead of trying to minimize the effects of the explosion. BP should have focused on frequently informing the authorities and the public on the evolution of the situation, and not on trying to cover its severity.

In other words, the company should have organized frequent press conferences in order to present technical aspects on the size of the oil spill, its causes, potential effects, and strategies developed by BP in handling of the situation. Although this strategy would have not have been useful in actually stopping or reducing the damages, it could have significantly helped improve the company's image as a result of the scandal.

The continuous interest from the media is another opportunity that BP failed to exploit. Given the fact that the press was continuously addressing the company, all BP had to do was properly respond to the interest of the media. The press issued several accusations to BP that the company could have counteracted. Instead BP chose to not respond to them. By refusing to respond to these accusations, the public considered this as their recognition.

Marketing Communications Recommendations

It is obvious that BP failed at handling this situation. The severity of the situation and its effects make difficult for BP to restore its image and to gain the credibility of its investors, of the authorities, and of the public. It is also quite unlikely that the company will be able to improve its image on short-term. Instead, it is recommended that BP develops medium term and long-term strategies that could help convince its investors.