What Went Wrong With BP
In 1909 Englishman William Knox D’Arcy struck oil in Iran, created Anglo-Persian Oil Company where profitability was a vigorous effort. Nearly bankrupt, Winston Churchill convinced the British Government to buy a 51 percent stake for a constant supply of oil. Now known as British Petroleum, the government began selling of its shares to increase productivity in the company. The company performance was in a constant decline and was forced to take on hefty cost cutting measures (Ingersoll, Locke, Reavis page 2).
Through streamlined workforce and a portfolio of activities, BP began to improve drastically through the mid-1990s. New CEO, John Browne, implemented an aggressive growth strategy by merging with Amoco and ARCO Oil Company. His strategy was able to double BP’s annual revenues and made them the largest oil producer in the U.S. As profits increased, accidents seemed to become more prevalent. Tony Hayward stepped in and replaced Browne in May 2007 as the new CEO. Thinking he could improve corporate performance by taking out levels of management, Hayward spoke freely about his aspiration to convert BP’s culture to one of less hazard adverse (Ingersoll, Locke, Reavis page 3).
Looking for greater advantages in the market, oil companies have moved their drilling to deeper water in search of larger profits. BP acquired the rights to the Macondo well, located in the Gulf of Mexico 40 miles offshore and 130 miles from New Orleans, from the U.S. Minerals Management Service in March of 2009. BP chartered the Deepwater Horizon drilling rig and its staff to drill the Macondo well. Mike Williams, Chief electronics technician for Transocean, a U.S. owned company but Switzerland based oil industry. Transocean was the operating company of the Deepwater Horizon. BP contracted with Transocean for $500,000 per day to lease their Deepwater Horizon. BP appointed Halliburton, the cementing contractor, to gain knowledge in the decision-making...