Deepwater Horizon

Deepwater Horizon
Name
Institution
Deepwater Horizon
The Deepwater Horizon drilling rig explosion was a 2010 industrial disaster that was followed subsequently by a fire on Transocean’s Deepwater Horizon semi-submersible Mobile Offshore Drilling Unit. The explosion and the resulting fire caused the Deepwater Horizon to sink while also leading to the death of eleven workers and leaving others with non-fatal injuries. In addition, the explosion led to long-term environmental devastation on the surrounding coastline resulting from an oil well fire and offshore oil spill. Following the loss of lives and the environmental caused by the Deepwater Horizon explosion, researchers have argued on whether or not the disaster could have been prevented. Undoubtedly, various elements of the disaster provide important lessons for risk managers on how to prepare and prevent such happenings. Considering this, this paper explores the fact that the Deepwater Horizon oil rig explosion may have been prevented through the adoption of global operating policies, carrying out an environmental impact study, addressing major deficiencies in the safety management system, focusing on contingency decisions rather than cost-cutting, and through adopting preventive technology.
The Deepwater Horizon drilling rig disaster could have been prevented if the top management implemented the global operating policies that were needed in the execution of deep-water drilling. Evidently, the company had been committed to a global strategy by the top management but the failure of the global operating policies to be implemented set the company up for disaster. Concerning this, Watkins (2010) points out that the Deepwater Horizon indeed “had no coherent global policy for how to conduct deep-water drilling.” From this, it is quite clear that the disastrous explosion resulted from the lack of harmony between the operating policies used locally and the global strategy that the company was using. Therefore, the implementation of global operating policies would have prevented the oil spill disaster and its horrible consequences. To add on this, the company in its strategy statement clearly emphasizes its commitment to be the world-best in terms of deep-water drilling. However, while this was a good strategy, the company did not have an outstanding global execution policy to support this, thereby creating an appropriate environment for a possible disaster. The above situation provides an important lesson for the risk managers that when it comes to critical activities, they are in charge of defining and driving the supporting operational policies and how they are supposed to be implemented. The management team in the Deepwater Horizon disaster case also failed to implement global operating policies when they chose to take their operations in the Gulf of Mexico where the regulations pertaining to deep-sea drilling were weak. Apparently, this would mean reduced cost of operations for the oil company considering that the same cost would be slightly higher in the United States. This was an unwise move for the company because its global strategy requires that it implements and executes equally global operating policies that clearly outline how the company would conduct the drilling. Focusing on this issue therefore, would have helped in avoiding the Deepwater Horizon disaster and therefore, this is a vital lesson for the risk managers.
The other way the disaster would have been prevented was by carrying out an environmental impact study that would have made the United States government to know exactly how a potential spill might be controlled. According to a Reuters report, the government in the U.S through its regulations, had exempted the Deepwater Horizon from doing this thereby leaving the company to carry out their operations as they saw fit (Jones & Mason, 2010). Evidently, the National Environmental Policy Act in the U.S requires that any project such as the BP that involves oil and gas to undergo a full environmental analysis. However, the department in charge of ensuring this, granted the Deepwater Horizon project categorical exclusion and allowed them to explore the project hence contributing to the eventual fire and massive oil spillage (Jones & Mason, 2010). By the U.S government encouraging inadequate hazard analysis in the Deepwater Horizon project, the Transocean company leadership therefore, possibly underestimated the potential risks of the whole project, which led them not to focus more on designing the system for safety hence leading to the oil spillage and deaths. This element of the disaster too, provides an important lesson to the risk managers particularly those dealing with gas, oil or other related resources. Specifically, the lesson for risk managers in this case is that the projects in the oil and gas industry often face three risks including environmental, political and economic risks and therefore the project-planning process should include each of these risks. In the company’s case, only the economic risks were emphasized on while giving less attention to the environmental risk. From this fact, the oil spill disaster in the Gulf of Mexico would have been prevented easily if both the government and the company’s management emphasized on the carrying out the environmental impact study. Carrying out hazard analysis is very important and necessary for risk managers since it helps in designing a system for safety.
Another way the Deepwater Horizon disaster would have been prevented is through ensuring that any deficiencies in the safety management system were addressed before embarking on the project. Inarguably, the Transocean management ignored many important safety measures in a manner that left the company susceptible to a d...