Even though the site was located far offshore the oil leaking from the open

Even though the site was located far offshore the oil

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Even though the site was located far offshore, the oil leaking from the open drilling hole quickly spread and polluted miles of sensitive coastline. The sea-floor oil gusher flowed for days on end with a total estimated discharge of 4.9 million barrels. After several failed efforts, the well was eventually declared as sealed on September 19, 2010. 28 Due to the persistent leak over several months, the spill imposed extensive damage onto the marine and wildlife while causing major adverse economic effects on fishing and tourism. 29 CONSEQUENCES FOR BRITISH PETROLEUM At first when the disaster became known to the public, a number of industry analysts downplayed the consequences of the incident for BP. For example, Ian Armstrong an analyst at Brewin Dolphin in London reasoned that “it’s not Thunder Horse, it’s not going to set them back three years”. Hence, he concluded that ”BP Plc., the biggest oil producer in the Gulf of Mexico, is unlikely to see output suffer after the Deepwater Horizon rig it leased exploded and sank, because the deposit it was drilling was relatively small” 30 Nonetheless, it seemed apparent that there had been tremendous pressure on everyone to advance the project development and thereby enhance production. In a contemporary article Glenn Morton, a 27 Richard Pendlebury, Why is BP taking all the blame? Mail-on-line, June 18, 2010. 28 On Scene Coordinator Report on Deepwater Horizon Oil Spill, Unites Sates Coast Guard, Department of Homeland Security. Washington DC, September 2011. 29 Harry R. Weber, Blown-out BP well finally killed at bottom of Gulf , Associated Press, September 19, 2010. 30 Brian Swint and Stanley Reed, BP's Gulf of Mexico production plans unlikely to be set back by rig blast, Bloomberg, April 23, 2010. 714-017-1 Please note that you are not permitted to reproduce or redistribute it for any other purpose. You are permitted to view the material on-line and print a copy for your personal use until 24-Mar-2021. Purchased for use by Alan Owen on 24-Mar-2020. Order ref F378754. Educational material supplied by The Case Centre Copyright encoded A76HM-JUJ9K-PJMN9I Order reference F378754
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11 geophysical expert in oil exploration and consultant to the oil industry explained: ”My analysis suggests production is not going as well as planned at Thunder Horse … after nearly two years of production history on the field, it is becoming obvious to most outside observers that Thunder Horse is not performing as it was expected”. 31 As a consequence corporate leadership was under a lot of pressure to push exploration and live up to analyst expectations on oil production possibly at the expense of safety. In some ways the safety issue had been transposed to others hands, as BP subcontracted the offshore drilling activities to Transocean, Halliburton and other oil exploration outfits. Nevertheless, BP could suffer from substantial reputational damages. As Christine Tiscareno an analyst with Standard & Poor’s in London commented after the incident: “It’s probably nobody’s fault, but in the perception of the media, BP is going to be under pressure.” 32
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