Case Study: BP Petroleum Station

This case study explores the challenges faced by BP Petroleum Company, including fuel contamination and strategic management. It discusses the intervention strategies implemented to address these issues.

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Case study
Student’s Name
Institutional Affiliation

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Table of Contents
Introduction....................................................................................................................................3
Problem description.......................................................................................................................5
The fuel contamination..............................................................................................................5
The strategic management............................................................................................................6
Intervention....................................................................................................................................8
References.......................................................................................................................................9

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Case study: BP Petroleum Station
Introduction
BP Petroleum Company founded in the early 1909s has gone tremendous transitions
adopting different name brandings across different timelines. Formerly founded as Anglo Persian
Oil Company, the company developed and managed refineries and oil fields across various
countries. After its merger with the Amoco Corporation, a United States company dealing with
the same product line of petroleum and its other products, and becoming one of the world
leading petroleum companies, the company was renamed British Petroleum Amoco 1982 but
later renamed BP PLC in the year 2000 (Tikkanen, 2019).
Headquartered in London, the company has seen transitions over time and has been
largely considered to be among the world best-performing oil companies in the world. Its
mergers and acquisitions of companies such as Atlantic Richfield Company led to its quick
expansion followed by quite a number of discoveries within its borders and outside the UK
(Bloomberg.com, 2019).
According to The Gurdian.com (2010), BP is an international oil and gas company which
is positioned sixth globally in as so far as market capitalization is concerned in the energy sector.
It is also the sixth largest oil and gas company worldwide. British Petroleum Company has
involvement in almost each aspect of oil and gas production and operations. The company
operates an array of product; refinery, petrochemicals, generation of power, trading and
distribution.
In terms of market capitalization, British Petroleum Company has internationalized its
business becoming one of the world best companies with well-diversified business portfolios. It

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runs its operations in more than eighty countries around the globe running close to seventeen
thousand service stations well distributed all over the world. Currently, BP company is among
the top listed companies in the London Stock Exchange as well as Germany's Frankfurt stock
exchange. According to Macrotrends.net (2019), British Petroleum Company has a market cap of
$148.93B.
Due to its globalization approaches, the company’s assets are remotely managed in the
areas of operation. The company has employed close to seventy-four thousand, and thirty-four
employees according to the Forbes employee index rating of 2018 (Forbes, 2018) across
different nations earning it Forbes' best employers for diversity award of 2019, the best employer
for new grads in 2018 among many other titles. The employee turnover rates at British Petroleum
Company has greatly reduced as a result of streamlined programs such as bonuses, proper
compensation, and development programs for its employees.
The company has been largely attributed with success in the oil refinery, exploration and
distribution world over but also has faced quite a number of drawbacks and public image
damage. Despite its successes, the company has had questionable processes and issues which
keep damaging its image especially in regards to environmental safety. For instance, the 2005
Texas Refinery explosion which caused significant environmental consequences, fatalities of
fifteen employees and injuries to one hundred and eighty others as recorded by the CSB report
(Csb.gov, n.d). The 2010 Deepwater oil spillage releasing oil into the marine life causing
tremendous effects to the marine life and to the other sectors (Pallardy, n.d).

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Problem description
Oil companies around the world have been faced with quite a number of challenges as so
far as their operations are concerned. These challenges if not well managed and monitored to
offer best solutions out of them, could have far many devastating effects on the delivery of the
services by the affected company and the denting of the company's image as a net outcome.
British Petroleum Company is not immune to such operational challenges which often come in
handy with other factors. In the recent past, the year 2005 to be specific, the company almost lost
its well-established image and reputation in the United States after the Texas City Refinery
Exposition killing dozens and leaving others wounded (Cbs.gov, n.d). Yet again, the Gulf
spillage is also known as the Deepwater Horizon Spillage of 2010 which had dire consequences
in marine life and economic activities, in general, struck British Petroleum company. These
occurrences almost brought the company to its knees once again. Other persistent problems that
BP has faced is the presence of impurities in fuel which has led to far-reaching complaints by
most of the fuel consuming clients.
The fuel contamination
Channik (2019) observes that the greatest ever recurring challenge that has ever faced the
British Petroleum Company is the problem of fuel contamination. In 2012 for instance, Channik
(2019) writes, British Petroleum Company recalled a 50,000 Barrels of petroleum fuel from its
refineries in North West Indiana. This fuel is said to have been contaminated with higher levels
than normal of polymeric residue which caused clogging of motor engines rendering the

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locomotives immobile due to failure to start. This elicited anger and rage among the many
motorists who were adversely affected. The recall also resulted in a lack of fuel in the region
eliciting further complaints therein.
Lecey et al, (2012) note that fuel contamination is due to an entry of a foreign object into
the fuel tank for example water which then initiate a microbial growth in the fuel tank often
referred to as diesel bug. Also notable, the fuel may degrade then produce a sludge or any other
damaging particles. Even though water is always the main contaminant in the fuels causing an
unnecessary chain of reactions in the fuel, there exist other contaminants. Such impurities get
into the locomotive engine system causing heaviness in the combustion of the fuel rendering the
engine knocked out and failed locomotion (Yu &Fisher, 2004).
At British Petroleum Company, this problem was realized by the persistent complaint of
motor customers who had issues with starting up of engines, and/or heavy emissions of poorly or
unburnt fuel which translated to failed locomotion of their engines. According to the mechanics,
the contamination was causing clogging in the engines due to consistent sludge production.
The strategic management
The issue at hand of contamination was an operational challenge which then requires the
application of leadership intervention into the strategic planning of the operations (Gifford,
Davies, Tourangeau, & Lefebre, 2011). This section, therefore, describes the choice of issue-
based strategic planning to overcome this recurring challenge. The issue based strategic planning
follows a three-step plan beginning with the identification of the most significant current
problem affecting the organization. In this case, the problem at the heart of BP Company is fuel
contamination. This has been identified as an occurring challenge which keeps eliciting

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complaints from various clients therein negatively impacting on the image and reputation of the
company (Pochampally, Nakula &Gupta, 2008).
Secondly, in the strategic plan, there should be a suggestion on the action plans to address
this ever looming issue (McNamara, 2019). British Petroleum Company moved in strategically
to adopt an action plan of overcoming this challenge. At the brink of the complaints from clients
regarding the presence of impurities in the fuel causing contamination and thence damage to
various engines, BP Company moved in fast to stop the spread of the suspected batch of
contaminated fuel by recalling the distributed batch to stop the further spread and further
damage. The company further replaced the affected tanks carrying the fuel batch in order to
contain the situation and also releasing a statement acknowledging the condition, offering a
reporting channel of any customer complaints and even going as far as compensating the affected
clients. Lastly, the action plan implemented is included in the strategic plan of the organization
for future implementation and interventions in similar occurrences.

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Intervention
Fuel contamination has been a great challenge to most gas and oil companies worldwide.
This is not just a British Petroleum Company problem but it cuts across all other companies with
similar business lines. As a continuous biting challenge, therefore, there should be a workable
approach to it to minimize the damage caused therein. First, there should be an inclusion of fuel
testing techniques that ascertain the purity of the fuels before sent out to the unsuspecting clients.
All fuels being distributed by BP Company should be tested for impurities which if detected,
should be cleaned as soon as possible before reaching the customer.
Secondly, servicing and re-servicing of the company’s reservoirs and storage tanks
should always be given a priority periodically. This will ensure complete removal of tank erosion
and corrosion related contaminations (Yang et al, 2013). Proper cleaning should follow
immediately a tank is emptied to ensure that the next batch of the fuel going into the tank retains
its purity.
There should be a better reporting channel coupled with a feedback mechanism in which
complaints are received and feedback to the complainants offered to that effect. BP Company
should think out a customer service approach which is more centered towards improving the
quality of service offered to the clients by first listening to their complaints and streamline its
services in addressing the customer complaints and concerns (Valvi & Fragkos, 2013).
Lastly, a proper compensational approach should be instituted followed by an incentive
or discount based strategy to the clients who present their complaints to the company (Kwan,
2018). This approach will ensure that the clients are motivated even at the helm of a problem
such as fuel contamination.

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References
Bloomberg.com. (2019). Bloomberg - Are you a robot?. Retrieved from
Channik, R. (2019). Chicago Tribune - We are currently unavailable in your region. Retrieved
from
Csb.gov. (2019). BP America Refinery Explosion | CSB. Retrieved from
Forbes. (2018). BP on the Forbes Best Employers for Diversity List. Retrieved from
https://www.forbes.com/companies/bp/#582462f384bc
Gifford, W., Davies, B., Tourangeau, A., & Lefebre, N. (2011). Developing team leadership to
facilitate guideline utilization: planning and evaluating a 3‐month intervention
strategy. Journal of nursing management, 19(1), 121-132.
Kwan, L. (2018). How to use pricing psychology to motivate your shoppers - WiderFunnel Blog.
Retrieved from
Lacey, P., Gail, S., Kientz, J. M., Milovanovic, N., & Gris, C. (2012). Internal fuel injector
deposits. SAE International Journal of Fuels and Lubricants, 5(1), 132-145.
Macrotrends.net. (2019). BP Market Cap 2006-2018 | BP. Retrieved from
McNamara, C. (2019). Basic Overview of Various Strategic Planning Models. Retrieved from
Pallardy, R. Deepwater Horizon oil spill of 2010 | Summary & Facts. Retrieved from

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Pochampally, K. K., Nukala, S., & Gupta, S. M. (2008). Strategic planning models for reverse
and closed-loop supply chains. CRC Press.
The Guardian (2010). Company Profile for BP. Retrieved from
https://www.theguardian.com/sustainable-business/profile-bp
Tikkanen, A. (2019). BP PLC | History & Facts. Retrieved from
Valvi, A., & C. Fragkos, K. (2013). Crisis communication strategies: A case of British
Petroleum. Industrial and Commercial Training, 45(7), 383-391.
Yang, W. M., An, H., Chou, S. K., Chua, K. J., Mohan, B., Sivasankaralingam, V., ... & Li, J.
(2013). Impact of emulsion fuel with nano-organic additives on the performance of diesel
engine. Applied energy, 112, 1206-1212.
Yu, D., & Fisher, P. (2004). U.S. Patent No. 6,739,844. Washington, DC: U.S. Patent and
Trademark Office.