British Petroleum is a multinational corporation that was founded in 1908. It initially had its single wells in the remote parts of Persia. The company slowly grew and within eight years it became one of the largest businesses in the world. It has been broadly divided into three main subsections that include oil exploration and production; gas, power, renewables and oil refining; and marketing section. All these departments work together to ensure that the company achieves its objectives. Since 1995, the company has been in the capable hands of John Browne, who has been its CEO until his untimely early retirement in 2007. This poses quite a significant challenge since it would have been quite a difficult task to fit into his shoes. John Browne was a leader who was not afraid to take any risks, and his courage is what led the company to the top multinational corporations ever known. Aside from the good leadership, British Petroleum, the company, has grown to an extent of employing over 100,000 employees in more than 100 countries. Despite all these, we cannot hide from the fact that the petroleum industry is a challenging one, firstly due to the insatiable need for oil products all around the world and the fact that there are significant risks involved, and British Petroleum is not an exception.
British Petroleum faced some challenges and risks to its success. Firstly, gone are the days when oil was easily accessed because the places that remain are not readily available due to their political and social instability. In this case, the company would incur massive amounts to access the oil, extract it and supply it to various users. Also, there has been the development of new technology, which also involves massive investments. There is also the fact the innovators have been looking into finding an alternative source of energy, which poses a challenge to British Petroleum, forcing it to change its strategy from being a petroleum company to being an energy company. These are just but the external risks that are likely to face the business. There are also internal risks that the company has to deal with. In this case, the paper draws attention to the risks that are likely to face British Petroleum, especially those regarding oil spillage and most importantly the methods in which these can be mitigated.
Risk Review and Report Section
The scope of this report is motivated by the various oil spillages that occur, and most importantly to ensure that they are reduced at all costs. This report aims at providing solutions that will cause the reduction in oils spillage. In the process of extracting and refining oil, spillages are likely to occur, and it is a paramount duty to ensure that they are as minimal as possible. Risks cannot be eliminated, but it is possible to make sure that they do not result to fatal incidences; for instance, there is the explosion that happened in the Gulf of Mexico in 2010. Due to such cases, the impact is still being felt six years down the line, hence the need to review the possible risks.
Most oil reservoirs are in risky areas that pose natural risks like geological hazards such as natural geological risks. It is evident that there are various uncertainties exposed by the rocks where the oil wells are drilled, and they are likely to cause serious accidents both to the people dealing with them and the environment surrounding it (British Petroleum, 2016).
Equipment failure could also be a risk in both the extraction of the oil, refining it and transporting it. It is not a surprise for equipment to fail and should it be a sensitive equipment, its failure could result in fatal effects.
There is also human error, which can pose a significant risk. That includes ignorance and the inability to do whatever step is expected in due time. This could result in the failure of equipment to function as expected. Human activities like water sports could also cause oil spillages.
There is also the physical degradation risk that includes the fact that physical equipment like pipes, wells and event tankers are subject to corrosion, puncture, and even earth movement. Such could result in spillages that could lead to fatal impacts in the environment and humans involved.
Probability and Impacts Section
If proper caution is not taken when handling oil, then there is a high chance that an oil spillage would occur, and that could have long and short term impacts on both the environment and the people. It is also paramount to acknowledge the fact that there is a higher probability for an oil spillage to occur due to human error compared to environmental factors (TASA Group, 2016). This is because it is clear that the humans are the ones seeking oil from the environment, and they are the people in control hence there is a higher possibility of human error occurring than an environmental hitch taking place.
Should an oil spillages occur, there are certain effects on the environment, the people, and the company. Oil spills have disastrous effects on the environment, as it affects the animals. It could lead to hypothermia especially in birds (TASA Group, 2016). Also, it can affect many animals within a large area through the food chain. It also pollutes water bodies which could kill flora and fauna of the waters. It also affects the soil too hence resulting in reduced crop production.
An oil spillage could cause an explosion that could lead to deaths of people and destruction of property. This could cause further impacts to the company as it incurs financial costs in replacing the destroyed equipment. Also, explosions due to oil spillages could compromise the health and safety of the community as a whole. In addition, it creates a bad image of the company; for instance, due to the explosion in the Gulf of Mexico, British Petroleum had quite a hard time to clear its name and come back to its former glory. These effects are adverse, and they need to be mitigated no matter the cost.
The impacts can be prevented by educating employees on the actions to take at whatever instance. There is also need to implement various technologies that enable physical systems to work efficiently without any issues. It is also necessary for the equipment used to undergo maintenance from time to time to reduce spillage occurrences. Above all, it is important to observe environmental conservation in all their operations.
Risk Threshold Section
There is also a tolerable amount of risk that can be accepted. In essence, some risks can be accepted but only if they are within tolerable standards. To be fair, it is not possible to extract oil and to expect the ground to be left spotlessly clean. A small amount of spillage is acceptable only if it does not lead to the food chain and does not compromise the health of the community.
The transportation tankers are also subject to corrosion especially during movement, and this could lead to spillage (British Petroleum, 2016). This is also some risk threshold only if it does not affect the transportation process and most importantly the individual transporting it. Also, the spillage of oil in water bodies may serve a protective role to some organism but only a small amount of it.
References
British Petroleum, (2016). Oil spill preparedness and response. Bp.com. Retrieved 12 August 2016, from http://www.bp.com/en/global/corporate/sustainability/how-we-operate/how-we-manage-risk.html
TASA Group, (2016). Preventing Oil Spills and Other Disasters by Risk Analysis of the Consequences and Probability of Failure: A Look at the BP Oil Spill in the Gulf Coast. The TASA Group. Retrieved 12 August 2016, from https://www.tasanet.com/Knowledge-Center/Articles/ArtMID/477/ArticleID/183/Preventing-Oil-Spills-and-Other-Disasters-by-Risk-Analysis-of-the-Consequences-and-Probability-of-Failure-A-Look-at-the-BP-Oil-Spill-in-the-Gulf-Coast
