Bp Operations Failure
Jeff Grisan
April 7, 2011
Case Study #2
British Petroleum
“BP is one of the world 's largest energy companies, providing its customers with fuel for transportation, energy for heat and light, retail services and petrochemicals products for everyday items” (BP, 2011). The organization is the fourth largest company in the world, operates in over 80 countries and employees more than 80,000 people. BP produces approximately 3.8 million barrels of oil equivalent per day with more than 18.3 billion barrels of oil equivalent in total reserves. The company has 22,400 service petrol stations worldwide, 16 refineries and exploration activities in at least 30 countries. In 2005, after some catastrophic failures and major disasters, BP made a corporate decision to rethink its approach towards Operating. BP developed a simple game plan that included four key aspects. 1. Alleviate any major risks and operate in a compliant approach. 2. Create a global common Operating Management System. 3. Transform management’s expectations and behaviors from a responsive compliance method to a continuous improvement philosophy. 4. Achieve sustainable Operational Excellence through the adoption of continuous improvement techniques and philosophies.
These aspects helped BP’s executive committee develop a clear and concise vision statement for the new operating management system that was officially launched in 2008. The vision statement claims “Our operating management system (OMS) provides a group-wide framework to drive a rigorous and systematic approach to safety, risk management and operational integrity across the company” (BP, 2011). The actual framework of the OMS system is divided into eight equal segments and describes how people, processes, plant and performance are required to operate throughout BP. The eight segments consist of privilege to operate, risk, procedure, assets, optimization, organization, leaders and results. All of BP’s major
April 7, 2011
Case Study #2
British Petroleum
“BP is one of the world 's largest energy companies, providing its customers with fuel for transportation, energy for heat and light, retail services and petrochemicals products for everyday items” (BP, 2011). The organization is the fourth largest company in the world, operates in over 80 countries and employees more than 80,000 people. BP produces approximately 3.8 million barrels of oil equivalent per day with more than 18.3 billion barrels of oil equivalent in total reserves. The company has 22,400 service petrol stations worldwide, 16 refineries and exploration activities in at least 30 countries. In 2005, after some catastrophic failures and major disasters, BP made a corporate decision to rethink its approach towards Operating. BP developed a simple game plan that included four key aspects. 1. Alleviate any major risks and operate in a compliant approach. 2. Create a global common Operating Management System. 3. Transform management’s expectations and behaviors from a responsive compliance method to a continuous improvement philosophy. 4. Achieve sustainable Operational Excellence through the adoption of continuous improvement techniques and philosophies.
These aspects helped BP’s executive committee develop a clear and concise vision statement for the new operating management system that was officially launched in 2008. The vision statement claims “Our operating management system (OMS) provides a group-wide framework to drive a rigorous and systematic approach to safety, risk management and operational integrity across the company” (BP, 2011). The actual framework of the OMS system is divided into eight equal segments and describes how people, processes, plant and performance are required to operate throughout BP. The eight segments consist of privilege to operate, risk, procedure, assets, optimization, organization, leaders and results. All of BP’s major
Cited: BBC News. (2011, Janauary 6). US oil spill: 'Bad management ' led to BP disaster. Retrieved April 8, 2011, from BBC News US & Canada: http://www.bbc.co.uk/news/world-us-canada-12124830 BP. (2011). BP at a glance. Retrieved April 6, 2011, from BP Web site: http://www.bp.com/sectiongenericarticle.do?categoryId=3&contentId=2006926 BP. (2011). Our operating management system. Retrieved April 6, 2011, from BP Web site: http://www.bp.com/sectiongenericarticle800.do?categoryId=9036186&contentId=7066903 Schulumberger. (n.d.). Blowout Preventer. Retrieved April 7 2011, 2011, from Schulumberger Oilfield Glossary: http://www.glossary.oilfield.slb.com/Display.cfm?Term=blowout%20preventer Williams, M. (2010, May 16). Blowout: The Deepwater Horizon Disaster. (S. Pelley, Interviewer)