BP Deepwater Horizon: Strategic Framework & Crisis Management
This paper examines the strategic framework of British Petroleum (BP) in the context of the 2010 Deepwater Horizon oil spill in the Gulf of Mexico. It traces BP's pre-accident strategies across environmental responsibility, safety management, and corporate social responsibility, then analyzes the failures that contributed to the disaster. Drawing on strategic management theory — including Porter's generic strategies, Monte Carlo simulation, and scenario planning — the paper evaluates BP's crisis response, identifies key weaknesses and strengths, and proposes recommendations for risk-based project management and sustainable strategic planning. The analysis concludes that proactive strategic thinking, ethical business conduct, and robust crisis preparedness are essential for organizations operating in high-risk industries.
- Introduction to BP and the Deepwater Horizon Accident: BP background and 2010 oil spill overview
- BP's Strategic Framework Before the Accident: Environmental, safety, and CSR pre-accident strategies
- Strategic Management, Risk Scenarios, and Corporate Responsibility: Theory, risk models, and corporate responsibility frameworks
- BP's Response to the Oil Spill Crisis: Crisis response strengths, weaknesses, and media criticism
- Internal Assessment and Strategic Recommendations: Project and risk management strategic recommendations
- Conclusion: Proactive strategy and lessons for global operators
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What makes this paper effective
- The paper integrates established strategic management frameworks — Porter's generic strategies, MBO theory, and Monte Carlo simulation — into a real-world corporate crisis, grounding abstract theory in concrete events.
- The use of a strengths-and-weaknesses structure in the crisis response section provides clear analytical organization and makes the evaluation easy to follow.
- The paper maintains a consistent forward-looking stance, connecting lessons from the disaster to actionable strategic recommendations rather than simply cataloging failures.
Key academic technique demonstrated
The paper demonstrates applied strategic analysis — taking a range of theoretical frameworks (competitive strategy, risk management models, CSR theory) and systematically applying them to a single high-profile case study. This technique shows how academic models translate into real organizational decisions and consequences, a core skill in business and management studies.
Structure breakdown
The paper opens with company background and the accident narrative, then moves through pre-accident strategy (environmental, safety, and CSR frameworks), a broader discussion of strategic management theory, and an analysis of BP's crisis response. It closes with internal assessment recommendations and a conclusion emphasizing proactive strategy. This progression from context → theory → application → recommendation is a textbook case-study structure well suited to strategic management coursework.
Introduction to BP and the Deepwater Horizon Accident
One of the most prominent names in the oil and gas industry is British Petroleum (BP), widely regarded as one of the largest providers of oil and gas for transportation, heating, lighting, and petrochemical retail services globally. The company's financial and operational performance for 2010 is summarized below:
- Sales and other operating revenues: $297,107 million
- Replacement cost profit: ($4,519) million
- Number of employees: 79,700 (at 31 December 2010)
- Proved reserves: 18,071 million barrels of oil equivalent
- Retail sites: 22,100
- Upstream operations: Active in 29 countries
- Refineries (wholly or partly owned): 16
- Refining throughput: 2,426 thousand barrels per day
(BP's Corporate website, 2010)
On 20 April 2010, the company faced a severe challenge when one of its oil rigs began leaking and could not be stopped. The Deepwater Horizon accident severely damaged BP's public image, and many observers urged management to overhaul its crisis management and public relations strategy. The accident resulted from a gas release that caused an explosion on the Macondo exploration well in the Gulf of Mexico. The intensity of the explosion was such that flames burned for 36 hours before the rig sank. The environmental consequences were primarily caused by the leakage of hydrocarbons into the Gulf of Mexico over 87 days before the well was finally sealed.
BP's management committee reported that the accident occurred due to a loss of pressure control in the well, which caused a blowout triggered by the failure of a blowout preventer — a device specifically designed to maintain consistent well pressure. Compounding the disaster, the blowout preventer's emergency function also failed to seal the well, allowing the leak to continue unchecked. Eleven people died in the accident and many others were injured. Severe damage was inflicted on the environment and surrounding communities. BP accepted responsibility for the clean-up and committed to compensating affected individuals, spending $17.7 billion on restoration measures. The company also pledged to work closely with government, local residents, shareholders, stakeholders, the industry, and the media in fulfilling its social responsibility obligations.
Beyond the direct lessons learned from the Deepwater Horizon accident, the incident had serious implications for BP's pre-accident strategic outlook, its crisis management response, its post-accident strategic framework, and the company's long-term future. These issues generated concern from media, investors, stakeholders, and social and environmental activists. The company therefore needed to develop a strategy that addressed the concerns of all parties and restored its image as a socially responsible organization committed to maintaining a healthy and cleaner environment.
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