Chapter 14, Problem 39DQ

Summary Introduction

Case summary:

British Petroleum's Deepwater Horizon offshore rig in the Gulf of Mexico exploded in a ball of flames on April 20, 2010, killing 11 employees. This initial tragedy set in motion frantic efforts to stop the flow of oil, followed by a long and arduous cleanup process.

Thunder Horse oil platform "listing precariously to one side, looking for all world as if it were about to sink." Thunder Horse was meant to be the company's crowning glory, the embodiment of its bold gamble to outpace its competitors in finding and exploiting the vast reserves of oil beneath the waters of the gulf.

The problem with the rig soon became evident. A valve installed backwards caused it to flood during the hurricane even before any oil had been pumped. Other problems included a welding job so shoddy that it left underwater pipelines brittle and full of cracks. There were warning signs that something was terribly wrong with the oil well. Among the red flags were several equipment readings suggesting that gas was bubbling into the well, a potential sign of an impending blowout. Those red flags were ignored.

Characters in the case:

No prominent characters in the case.

Adequate information:

Federal panel charged with investigating the spill examined 20 "anomalies in the well's behavior and the crew's response." The panel's final report blamed both BP and its contractors for the failures that led to the explosion on the Deepwater Horizon. Many of those failings stemmed from shortcuts to save time and money. However, the report also faulted the government for lax oversight of the companies.

To explain:

The things BP could have done better by using Exhibit 14-2.