Discuss about the BP Deepwater Horizon Oil Spill and Offshore Drilling.
Every organization or tasks have specific systems to perform. This can be understood with the example that an automobile’s system is to take people as well as things from one place to another. Each and every part of a task or organization needs to be present so that systems can carry out its purpose in an effective manner (Kim, 2018). With the help of system thinking one is able to decide over various solutions available to deal with a specific problem. Hence the main advantage of systems thinking is that it helps to take informed decisions and hence, the end results are according to desired results (Goodman, 2018). In the below essay systems thinking will be seen in relation to the BP Deepwater Horizon Oil Spill and Offshore Drilling which took place in the year 2010. The below essay has been written with an aim to analyse about the Horizon oil spill as well as the reason behind this disaster. On the basis of the reports published over this issue this essay will cover the reasons behind the failure of the management as well as lack of systems thinking in the decision making process. To provide valid arguments certain theories has been adopted related to managerial activities in order to form the basis of the essay.
The massive oil spill which took place in the year 2010 floated for months in the waters of Gulf of Mexico. This is considered as one of the largest marine oil spill in the history of America as well as in the history of marine oil drilling activities. The oil drilling rig Deepwater Horizon exploded as well as sank in waters which took the lives of 11 people whereas 17 were seriously injured. This caused the largest oil spill in the water which was nearly 4 million barrels of oil which was floating over the water as well as also damaged Macondo well in the time duration of 87 days from the spilling of oil, and this oil spill was finally capped on the 15th of July, 2010. The United States of America went a step further and filed a case in the District Court against the BP Exploration and Production as well as few other defendants that were responsible behind this incident (USA Environmental Protection Agency, 2017). Human error was also one of the major reasons behind this incident, which can also be referred to as engineer’s error or risk because of engineer’s mistake. The engineers’ team of BP knew that they were dealing with a very tough well and despite of knowing this fact the engineers took the decision of using cheaper equipment, as well as taking quick repetitive actions which were dangerous in nature. A couple of such wrong decisions aggravated the situation and the end result of this came out in the form of this disaster. Another engineer mistake which played a major role in this incident is that of the blowout preventer which was supposed to control the leakage also malfunctioned (Hammer, 2010). The engineers failed to undertake systems thinking and as a result many errors occurred like improper interpretation of the signals related to well as well as the integrity of the safety system; not up to the mark modification was seen in the safety systems; problem in the design of the rig; also there was failure to comply with the administrative controls which were required in order to undertake safe operations; also the organization structure failed in following the American Petroleum Institutes Recommended Practices 75 which is related to the circulation work of the drilling mud (Velez & Liles, 2011). And the list goes on; nearly twenty five errors have been mentioned behind this incident. Some of the errors are related to engineer’s risk, faulty leadership, poor management, improper risk management, less importance to safety etc. It is very important that safety is considered as the most important condition in organizations especially in such set ups which can impose threat to human lives as well as bring damage to environment (Smith, Kincannon, Lehnert, Wang, & Larrañaga, 2013). According to the “National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling” said that this incident could have been prevented or at least its impact could have been reduced if the engineers at BP would have reacted in a proper sensible and timely manner (Gilbert, 2015).
According to the National Oil Spill Commission in the year 2011 it was found out that the major failure behind this incident was the improper risk and safety management as well as organizational and operational behaviour at BP (National Commission on the BP Deepwater Horizon Oil Spill, 2011).Tom W. Reader in his article has mentioned about the theorem of non-technical skills that is social and cognitive skills which are required while working in such complex working environments. Through this theorem the author is able to find out about the operational activities related to the well blowout (Reader & O’Connor, 2013).
In order to avoid such incidents in future tools and techniques related to systems thinking should be adopted by the organization. Some of the commonly used tools related to systems thinking include brainstorming tools which analyses the qualitative as well as quantitative variables related to a specific issue and tries to find out solution to the specific issue. Dynamic thinking tools can also be used in order to evaluate the variables available. Some of the diagrams that help in the evaluation include behaviour over time graph, casual loop diagram, as well as systems archetype. Apart from dynamic thinking, structural thinking tools can also be used and also computer based tools can be used (Kim, 2018).
Having a proper risk management or incident management policy of the organization, helps in increasing the value of the business in the market. If an organization has proper risk management policies then the other partnering agents or the customers or clients of the company show their interest in undertaking business activities with that particular organization. Hence, this reflects that risk management also has the ability to improve the business value of an organization (Ruth, 2018). In this case it can be clearly said that because of this incident the business value of Deepwater Horizon is reduced not only in intangible terms but also in monetary terms. The year this incident took place BP suffered a loss of $16.973 billion because of the costs associated with the accident (Jones, 2011). Also the organization lost 55% of the shareholder value of the organization soon after the Deepwater Horizon incident took place. So this reflects that incidents may negatively impact the business value of an organization (Chamberlin, 2014).
Risk management of BP Deepwater Horizon was no doubt inadequate hence there is a need to adopt resilience based design instead of risk management in order to tackle the situations more quickly and smartly. The main benefit of this concept is that it provides with the ecological analogues related to diverse situations as well as also suggests ways of adoption of methods in order to deal with high consequence disruptions that can be caused because of drilling activities (Park, Seager, & Rao, 2011). Risk management starts after the identification of the hazard which may prove to be problematic if any unknown hazard takes place (Normile, 2011). Resilience based management suggests with options to deal with unexpected and unidentified hazards with the help of the adaption as well as experimentation and innovation along with diversity (Klein, Nicholls, & Thomalla, 2003).
Jon Espen Skogdalen and others in their article has discussed about the indicators that should be given importance in Risk Level projects (RNNP). On the basis of the analysis of the BP Deepwater Horizon the authors have suggested few extensions to the indicators related to the RNNP (Skogdalen, Utne, & Vinnem, 2011). It is very important to include the Human and Organizational Factors (HOF) as well as Risk Influence Factors (RIF) like the working practices, communication as well as management activities. The Quantitative Risk Analysis (QRA) of the projects is required to include RIFs as well as HOFs so that a proper analysis can be conducted and the true picture can come forward. In the case of Deepwater Horizon it can be said that the blowout took place because of the loss of well integrity. Well integrity in simple words can be understood as organizational as well as technical means which is adopted in order to reduce the risk of the release of any uncontrolled fluid of a well (Standard, 2004).
There are different types of organizational maturity models like progression maturity models, capability maturity models (CMM), as well as hybrid maturity models. BP Deepwater Horizon should have adopted capability maturity models as it provides the organization capabilities to handle situations during stress. The main advantage of this model is that it helps in measuring the core competencies of a project as well as to retain these competencies at the times of emergencies. This model helps the organization to measure the maturity on a quantitative basis and hence the organization has the real figures in front of them to decide over matters (Mehravari, 2014).
Heavy damage to the environment was done because of this incident and as a result global leaders emphasized on the need of adopting green project management in the portfolio of such organizations. BP should go for a more structured approach while adopting the environmental factors in the project management process. Proper portfolio management gives the ability to deal with risks in a much more planned manner. With the help of the investigations it was found out that, BP had just copy pasted the old environmental plans and policies from other companies. This reveals the damage in the management as well as the organizational structure of the organization. The careless attitude of BP was also one of the major reasons behind this catastrophic event. The theory of Green Project Management should be adopted in the Project Charter of the company as the company has its major activities related to environment. (Krasnoff, 2016). Proper portfolio management also helps to remain prepared for the expected as well as unexpected situations in the future and strengthens the risk management of the organization (Chen, 2011).
In order to achieve portfolio management project portfolio management life cycle should be adopted by the organization. Project portfolio management life cycle consists of five different phases which includes establishing portfolio strategies; evaluating that the project is in alignment with the major objective of the organization; prioritizing the project and holding less important work or funding process; selecting a balanced portfolio on the basis of the balanced portfolio projects; and the fifth phase is related to managing the active projects (Safari, 2018). This is the lifecycle of a project portfolio and this need to be undertaken by the project managers very efficiently.
Portfolio alignment is another important concept that forms an important part of the project management process. Strategic alignment needs to be developed by the project manager and for these purpose two mechanisms are there in front of the project manager namely, initial establishment of the project portfolio, as well as adjusting the portfolio of ongoing projects. Portfolio alignment would have helped the BP Deepwater Horizon to analyze the priority as well as would have diverted all the system thinking towards this project and this way the organization could have been able to avoid this incident (Filippov, Mooi, Weg, & Westen, 2012).
Conclusion
To conclude it can be said that a number of reasons were existed behind the disaster of Deepwater Horizon in the year 2010 like the improper technical as well as organizational structure, improper design of the rig, lack in the non-technical skills of the BP team, improper risk management, improper leadership as well as management, negligent attitude towards safety conditions, least emphasis given to the environment factors, etc. The list goes on but the main gist of all these factors is that this disaster could have easily avoided or the impact could have been reduced if the BP team was in a condition to connect the dots and understand the indicators that they were receiving through the tests conducted as well as the nature and structure of the well. The company lacked in proper risk management and did not estimate the damage that could be done to the environment. A shocking fact which was encountered at the time of literature review was that the environmental plans and policies of BP were just copy pasted from some other companies. BP undertakes the activity of drilling the deep waters which in itself is such a big risk as well as a challenge against the nature, but still BP decided to ignore this fact and took the environment very lightly and the consequences of this were seen on April 20, 2010. Several theories and methods has been suggested in the above essay that can help the company to start afresh by keeping in mind about the flaws that the BP possessed earlier and which should be avoided know.
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