Deepwater Horizon - Teaching Note: Spiling pil, money and trust

On April 20, 2010, Deepwater Horizon—a floating, semi-submersible, dynamically-positioned drilling unit—exploded after a massive natural gas gusher from a natural reservoir located more than 13,000 feet under the sea floor. The explosion killed 11 people working on the platform and injured 17 others. After the explosion, an estimated 4.9 million barrels of oil spilled into the Gulf of Mexico over a period of 87 days, causing unprecedented damage to the environment and to the local economy. BP was the main lease operator in that area and the main company responsible for the Deepwater Horizon drilling project. According to the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, the explosion was caused by poor security procedures and manual errors. However, at the time of the accident, the Deepwater Horizon team met the regulations and indications stipulated by the Mineral Management Service (MMS), the US Government agency responsible for guaranteeing the safety and security of offshore drilling rigs. During the three years prior to the accident, Deepwater Horizon had not received any citation for non-compliance. After the accident, BP's top management had to deal with at least three critical issues. First, understanding who should be responsible for setting proper safety standards. Is this the responsibility of the MMS or BP? Second, it had to design an international safety regulation. Should BP adopt homogeneous safety standards around the world, or should it just adapt to local legislation? Third, it faced defining its role and responsibility in the safety standards of its operational partners. Should BP be responsible for imposing safety standards on its contractors around the world?