1. EXECUTIVE SUMMARY

The main and the core theme of the article are to not only understand the impact of negligence that was made by the company but also to understand how the company treats the whole case. How they try to manage to get out of the situation by not showing the event on the financial statements with proper information. This article also tells us that how concerned we are to save the nature and to protect it. How the big corporations are playing with the lives of people and the nature. It also covers the impact and results on the globe and another very important part that is what will be the impact of this Deepwater Horizon disaster at the energy sector, economies of the world. It also draws our attention towards the protection and safety measures to ensure the protection of people as well of the nature itself.

2. INTRODUCTION

The Deepwater Horizon oil spill which is also known as BP oil spill, the Gulf of Mexico oil spill and the Macondo blowout is one of the worst case of oil spill that ever happened in the history. It all happened and started on 20^th April 2010 in the Gulf of Mexico on the near Mississippi River delta. After explosion a huge fire got the hold of drilling rig after which the oil leak was discovered on the afternoon of 22^nd April 2010 when a large oil slick spread on the site and started to expand and cover the sea with a speed. The oil leaked and flowed on the sea for 87 days continuously. 11 missing members were never found despite the search operations that carried out to find the missing ones. The oil spill covered the sea due to which not only the marine species were in danger but also the spill badly affected the whole environment. The impacts of the oil spill were huge. It affected the ecosystem of the globe.

3. BACKGROUND OF COMPANY

The former name of the BP is British Petroleum founded in 1908. It is one of the world’s seventh major Oil and Gas Company. A British based multinational company whose head office is situated in London, England. In 2012, it was the world’s sixth largest Oil and Gas Company and the company with the world’s fifth largest revenue. It was operating in variety of areas, in fact in all areas of oil and gas. From exploration, production to distribution, marketing and trading. The company was operating in more than half of the world. BP is directly involved in several major environmental and safety incidents.

4. BACKGROUND OF DRILLING RIG (DEEPWATER HORIZON)

The Deepwater horizon was a 9 year old floating and dynamically positioned drilling rig that could operate in the deep waters which is up to 10,000 feet deep into the waters. The Deepwater Horizon is situated in Macondo oil well in the Mississippi canyon. It was built by a South Korean company and owned by Transocean. It was officially built for R&B Falcon but later became the part of Transocean. It was one of the powerful rigs in the world due to its ability to rig in the deep waters. It was chartered to British Petroleum from March 2008 to September 2013.

5. LOCATION OF DEEPWATER HORIZON & IMPACT OF OIL SPILL

The deepwater horizon is located in the Gulf of Mexico near Mississippi River Delta, United States. Due to the oil spill the Louisiana’s governor declared a state of emergency in the state. Louisiana coast was affected due to the oil spill. The spill not only affected on the impact area but it affected the nearly the whole world. According to satellite images, it was estimated that the spill directly impacted about 180,000 km of ocean. In late June, the oil reached Gulf Park Estates in Mississippi.

6. EXPLOSION

The explosion occurred at about 9 pm on 20^th April 2010. On the afternoon of 22^nd April 2010 a large slick began to spread at the site of the rig. The well was official sealed on 19^th September 2010. The explosion occurred due to the high methane gas pressure. At the time of explosion there were approximately 126 crew members on board. Eleven missing persons were never found and died in the explosion. The remaining members were rescued.

7. VOLUME OF OIL SPILL

On 22nd April 2010 oil leak was discovered on the site of explosion. Oil slick began to spread in the affected area. The oil flowed on the sea for about 86 days. A consensus estimated that roughly five million barrels were released due to the oil leak on the site. There was a huge difference in the estimation rate of flow of oil per day. According to the BP one thousand to five thousand barrels per day flowed but the Flow Rate Technical group estimated that sixty two thousand barrel of oil flowed per day making it the world’s largest oil accidental spill.

8. LEGAL ASPECTS & RESPONISIBILITY

Numerous investigations and commissions made for various purposes for instance what was the reason of explosion, the impact of oil spill, on human loss, marine loss etc. Transocean received an insurance settlement for the loss of the deepwater horizon of US$ 401 million. On September 2010, British Petroleum issued a report on its web site in which it placed some of the responsibility on Halliburton and Transocean. To conclude the report, the British Petroleum claim half of the responsibility of the event, as the Transocean was also blamed to be responsible for it. But Transocean placed blame on BP. British Petroleum was plead guilty for the deadly event. The US Department of Justice formed a task named “Deepwater Horizon Task Force” to consolidate investigations into possible criminal charges against the deadly explosion. Later the Department of Justice announced that both parties i.e. British Petroleum and Department of Justice had reached a $4 billion settlement against all federal criminal charges which were related to the explosions and spill. It was the largest of its kind in the history. In 2012, U.S Government temporarily blocked and banned British Petroleum from bidding any new federal contracts.

9. IMPACT OF OIL SPILL ON ECONOMIES

After the event, while it was still in progress, it was said to be a disaster with far reaching consequences that will impact the whole world. Global economies, marketplaces and policies will be affected in the near future due to this oil spill.

Ø IMPACT ON US ECONOMY

The US economy was badly affected due to the oil spill as it spill in the ocean and reached the coasts and shores of US. The oil spill directly affected the marine species. The initial cost estimates to the marine industry were $2.5 billion. NOAA banned fishing in the affected area and on 23 June, it lifted the fishing ban. Different type of fishes was in danger due the event. Rescue operations were carried out to save the marine life and the species of the water. The tourism also affected as the tourists cancelled their vacations on the coasts when the spill reached on the coasts. The business was badly affected overall. The U.S government rejected cleanup offers from various countries.

Ø IMPACT ON UK ECONOMY

There was anger for the news being published by the American press on the UK side for miscommunication and misusing the British Petroleum for their company. It was in the street of that US dumping the blame of the event on the British due to which economy of the UK was affected.

Ø IMPACT ON ENVIRONMENT

There are approximately 8500 species that live in the affected area where the oil spill occurred. The impact of the oil spill on these species was deadly. The oil contained a methane gas in a large quantity due to which the oxygen levels decreased in the water. Fishes were the victims of oil spill which occurred due to the negligence of BP. A report from the University of Florida said that many locations showed 20% of less fish in the water. Damage to the ocean floor was also devastating.

Ø CREW AND STAFF MEMBERS SAFTEY:

At the time of explosion, there were 126 crew members on board out of whom seven were of BP and seventy nine of Transocean and of various other companies. Eleven persons that were missing during that explosion never found despite a three day Coast Guard search operation and that are believed to be dead in the explosion. Ninety four crew members were rescued by different resources. Seventeen were treated for injuries. The Deepwater horizon sank into the deep water on the morning of 22nd April2010.

10. CONSEQUENCES OF OIL SPIL

The consequences of the event of oil spill were deadly. It not only cause short-term but also long term harms to the human health, environment and ecosystem. Studies suggest that one-third of the oil released remained in the Gulf and further suggested that the oil on the bottom of the surface of sea was not degrading. The spill area was the part which was hosting more than 8,000 species. Oil that affects the coastal areas increased the erosion due to the death of mangrove trees and marsh grass. It was reported in 2013, it was reported that dolphins and all the other marine life continued to die at a very high rate and those who don’t died got ill due to the oil. BP denied that the conditions are related to the spill. It was reported by Al Jazeera that the ecosystem of the Gulf is in real crisis. Scientist said that oil and dispersant mixture is embedded in the sand. A study also found that the fishes died of cardiac arrest due to crude oil. It was mentioned that even a very low amount of crude oil can slow the heartbeat of the marine species. Most of the impact of the event was on the marine species. Thousands of species are at risk due to the oil leakage. In March 2012, definitive link found between the deaths of a Gulf coral community. The dolphins also got affected in the spill region. Fishes were found without eyes, covers etc. due to the chemicals that were used. The methane gas was also the part of the leak from the well harmed to the marine life. It can potentially suffocate marine life and can create death zones where oxygen is depleted.

11. MORAL RESPONSIBILITY OF BRITISH PETROLEUM & RELIABLE FINANCIAL DATA REPRESENTATION

It was the moral responsibility of British Petroleum to show the exact figures of the oil spill, the impact on environment, impact on ecosystem etc but they did not fully disclosed the details of the social damages or ecosystem and also the underlying calculation methodologies that were used to calculate pre-tax charge of US$40.9 billion. British Petroleum limited discloser does not provide stakeholders with the full picture of the financial, environmental and social implications of the oil spill. Furthermore, there is a need for more reliable environmental accounting and reporting practices has to be regulated. The up to date status and trends of the ecosystem within the reporting entity operates. The methodologies used to show results and impact assessment should be upgrades.

12. CONCLUSION

a. To conclude and draw a result from the aforementioned discussion we can say that there is great need to understand that Mother Nature is responsible for our existence and that we should care for it the most. Moreover, there is need to invest more in the areas of prevention and tackling methodologies so that these kinds of events never happened again.

b. The reports structure should be amended so that all the necessary information could be brought forward with a clean and clear view. The financial and reporting structure should support the clear information that could be easily read and understand by everyone. The negligence’s that arises in the case of BP due to cost cut methodologies should be avoided to prevent the loss of humanity, environment and the globe as well. Everyone should develop a sense of responsibility towards the Mother Nature. Furthermore, BP tries to play with the politicians more than the courts and try to win the regulators so that they could get out of the situation. The impact of this oil spill was deadly in any aspect. BP should claim more responsibility than they did.