BP's Response to the Deepwater Horizon Oil Spill

This assignment analyzes BP's response to the Deepwater Horizon Oil Spill. It explores BP's implementation of eco-systems for cleanup and mitigation, the financial implications of their actions, and the motivations behind government policies and BP's strategies. The analysis focuses on the effectiveness of BP's response, considering both environmental and social impacts.

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Topic- Article analysis on BP’s responses to Deep water Horizon
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With the increasing ramification of economic changes and complex business functioning,
BP organization has grown very drastically and implemented various eco systems to reduce the
negative impact of hazardous substance and emission. The deep water Horizon Oil spill is the
biggest tragedy and resulted to high amount of loss of money and individual lives in Gulf of
Mexico. This report reflects how well BP had responded to the deep water Horizon Oil spill. It
has been observed that government has put high amount of penalties and traits on company to
increase the overall eco system in determined approach. It is evaluated that company has
destructed its financial implication throughout the time after deep water Horizon Oil spill case.
Point of discussion
In this article, it is given that BP has responded to the deep water Horizon Oil spill by
installing various eco system and cleanup all the hazardous substance and emission in Gulf of
Mexico. However, government had implemented various rules and regulations to reduce the
impact of hazardous substance on society in Gulf of Mexico (Lamendella, et al. 2014). The
financial implication of BP’s responses to deep water Horizon Oil spill has shown the negative
financial strategy. The point of discussion in this article could be why deep water Horizon Oil
spill has occurred and government policies and rules and BP responses to mitigate the negative
impact of deep water Horizon Oil spill on the people living in Gulf of Mexico. All the
investment and expenses made by BP in response to deep water Horizon Oil spill has been
charged as operating expenses. This will not only reduce the tax burden of company but also
decrease the overall profit to offset its tax burden from other units (Jaggi, et al. 2017). The main
point of discussion in this report is related to tax burden and reducing the negative impact of the
deep water Horizon Oil spill in gulf of Maxico. However, BP had used various financial

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implications to reduce the tax burden and increasing the effectiveness of deep water Horizon Oil
spill saving eco program. BP should have deposited whole penalties amount in escrow account
for the betterment of the people living in Gulf of Maxico. Moreover, BP needs to install various
eco system to reduce the negative impact of its hazard substance in social and environment.
Interest theory and motivation to regulators
The financial implication of BP’s responses to deep water Horizon Oil spill has been used
as deduction from the tax payment. As per the interest theory, eco system installed by BP in Gulf
of Mexico was for reducing the negative impact of its hazardous substance. Therefore, BP should
have not be allowed these expenses used as factors of reducing its social responsibility to pay off
tax to government. Company should have charged these expenses as capital expenses instead of
charging the same as operating expenses (Powers, et al. 2017). As per the interest theory, BP
should have deposited all the penalties and traits amount in the escrow account to discharge its
social and environmental liabilities. BP had used its investment in the eco systems to reduce its
tax burden and other investments to reduce the overall tax burden. If company wanted to
increases its brand image then it should have installed eco system and invested in escrow account
for the betterment of lives.
Motivation of politician as regulators
As per the interest theory, regulators of Gulf of Mexico could have asked company to pay
off all the imposed penalties and tax amount in determined approach. In addition to this,
company had also failed to deposit the amount of penalties which are uncertain in its escrow
account. Therefore, it is observed that BP should have deposited the entire penalties amount in
its escrow accounts (Michel, et al. 2013). The main motivation for politician is development of

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society and environment at large. It is observed that if political party could strengthen the rules
and regulations for the eco system implementation and oil spill case then it will reduce the
occurring of events like deep water Horizon Oil spills cases in Gulf of Mexico. If government
strengthens the social and environmental policies then it will increase the effectiveness of
business functioning of BP. Therefore, it is given that if BP wanted to rebuild its brand image in
Gulf country of Maxico then it should have invested its capital in establishment of eco system,
reducing the negative impact of its hazardous substance and providing benefits to other
associated persons. The main motivation for political party is to save the people from the
hazardous substance in social and environment and providing best possible benefits to society at
large.

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Conclusion
After evaluating all the details and BP’s responses to deep water horizon Oil spill, it is
considered that if company emerges hazardous substance in the society due to its business then
proper level of eco system and mechanism to reduce the negative impact of these hazardous
substance should be installed. In this case, BP had failed to perform its duty as per the best
interest theory in the Gulf of Mexico. After evaluating the case study given, it could be inferred
that if BP wants to deliver good result to society and economic at large then it should better off
to provide financial assistance and other benefits to society. BP instead of charging its
investment as revenue expenditure should treat this amount as capital expenditure. It will
increase its tax burden to discharge its social responsibilities. This deep water Horizon Oil spill
has set up a good example for other organization to reduce the negative impacts of their
hazardous products in Gulf country of Maxico.

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References
Jaggi, A., Snowdon, R. W., Stopford, A., Radović, J. R., Oldenburg, T. B., & Larter, S. R.
(2017). Experimental simulation of crude oil-water partitioning behavior of BTEX
compounds during a deep submarine oil spill. Organic Geochemistry, 108, 1-8.
Lamendella, R., Strutt, S., Borglin, S., Chakraborty, R., Tas, N., Mason, O. U., ... & Jansson, J.
K. (2014). Assessment of the Deepwater Horizon oil spill impact on Gulf coast microbial
communities. Frontiers in microbiology, 5.
Michel, J., Owens, E. H., Zengel, S., Graham, A., Nixon, Z., Allard, T., ... & Rutherford, N.
(2013). Extent and degree of shoreline oiling: Deepwater Horizon oil spill, Gulf of
Mexico, USA. PloS one, 8(6), e65087.
Powers, S. P., Peterson, C. H., Cebrian, J., & Heck Jr, K. L. (2017). Response of nearshore
ecosystems to the Deepwater Horizon oil spill. Marine Ecology Progress Series, 576,
107-110.

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