bp oil spill

Topics: Petroleum, Ethics, BP Pages: 6 (1567 words) Published: December 21, 2013


BP Case-Study
Ethics in Today’s Organizations
Nicki Marzolf
March 1, 2011


Company Summary

Beyond Petroleum (BP) is a British oil company that was founded over a century ago by an affluent business man, William D’Arcy. D’Arcy put all of his money into searching for oil in the Middle East; a decision that nearly bankrupted him, because it took six years before any oil could be tapped. It is important to note that locating the oil was not the only problem BP, or Anglo-Persian Oil Company at that time, faced; moving the oils was just of a difficult task to maneuver. They decided to build a pipeline across the region – an undertaking that lasted more than two years. (Ferrell et al., 2011, p.432)

By the early 1900s BP was again running out of money, until Winston Churchill convinced parliament to allow BP to supply the navy’s fuel. It was a British company, after all, so it would support Britain’s interests. Britain then became one of the company’s biggest shareholders. This is significant because this instance helped spark the debate over politics and governments’ investments in oil companies –a topic that is still debated today. (Ferrell et al., 2011, p.432)

After the mid-twentieth century oil was in high demand due to automobiles being mass produced. However in the mid 1970s, political turmoil in the Middle East caused oil production there to fall from 140 million to 500 barrels (Ferrell et al., 2011, p.432). With the demand for oil still high and the supply low, BP was forced to find other untapped oil supplies. BP found some oil fields in places such as Alaska and off the coast of Scotland. These isolated locations for drilling again forced hoisted creativity of BP engineers, and they began to innovate new ways to tap and transport the oil. One of these ideas was the Trans-Alaskan Pipeline, “the largest civil engineering project in



North America, measuring 746 miles long” (Ferrell et al., 2011, p.433). BP made honest efforts to ensure the environment around drilling projects would be preserved. However, sometimes these efforts were thwarted, which has become one of the central ethical issues for BP, among other things, including charges of death and fraud. (Ferrell et al., 2011, p.433-434).

BP has recently sought to enhance their sustainability. In an effort to repair its image and seize an opportunity to invest in future capital, BP has invested in developing other energy sources, such as wind, solar, and biofuels. BP has also has committed itself to reducing greenhouse gas emissions and lessening their contribution to global warming, by creating the aforementioned energies as wall as investing in practices like carbon sequestration and storage (Ferrell et al., 2011, p.435-436). Analysis

What is the single most important ethical issue presented in the case, how has the issue affected specific stakeholders?
I think the single most important issue presented in the case is a lack of environmental responsibility. BP poorly maintain their oil drilling and transporting equipment, and these “non-actions” contribute to the numerous oil spills over the years which destroy the environment – killing plants and animals, as well as the explosions which are responsible for claiming several human lives. These issues garner the most media coverage, as well as probing by environmentalists and other special interest groups. These secondary stakeholders influence the courts and governments to penalize companies like BP for this kind of irresponsible behavior. The negative reports discourage shareholders and employees. Unfortunately, I think the most customers, care



more about the price of gas than which company they are purchasing it from. What has the company done to address their ethical issues, what could they do differently to avoid future ethical issues?

BP has tried to address environmental issues by a) simply acknowledging that...

References: BP: BP Releases Report on Causes of Gulf of Mexico Tragedy. (2010, Sept 8). Retrieved
March 2, 2011.http://www.bp.com/genericarticle.do?categoryId=2012968
Gulf Residents Miffed By BP Resuming Dividends. (2011, Feb. 1). USAToday.com.
Retrieved on March 2, 2011from http://www.usatoday.com/news/nation/environment/
Skoloff, B., and Wardel, J. (2010, Nov. 2). BP Oil Spill Cost Hit $40 Billion, Company
Returns to Profit
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