Deepwater Horizon Project Analysis

This assignment involves a comprehensive analysis of the Deepwater Horizon project as a plc. It requires evaluating the advantages and disadvantages, identifying legal requirements according to UK corporate governance code, and examining the role of management in driving the firm towards objectives and overcoming complex situations. The report should also consider the ethical practices of environmental groups and inform them about the industry's objective.

COMMERCIAL AWARENESS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
1. BUSINESS STRUCTURE AND CORPORATE GOVERNANCE...........................................1
a) (i) Public and Private limited company..............................................................................1
a) (ii) Deepwater's Advantages and Disadvantages of being a plc.........................................1
b) Requirements of the UK corporate governance code for listing on London Stock Exchange.
................................................................................................................................................2
2. THE ROLE OF MANAGEMENT..............................................................................................2
a) Role of new CEO at Deepwater.........................................................................................2
b) Skills and Attributes required by a candidate....................................................................3
3. PESTLE ANALYSIS OF SHALE GAS INDUSTRY................................................................3
4. Corporate social responsibility and communication with customers..........................................4
A. 1)Corporate social responsibility.......................................................................................4
A) 2. Three things that a company should do to ensure that gas industry should do to ensure
that they behave as good corporate citizens...........................................................................4
B) Identifying three ways s in which the fracking industry could communicate with
potentially hostile stakeholders..............................................................................................5
CONCLUSION ...............................................................................................................................5
REFERENCES................................................................................................................................6
A comprehensive environmental impact assessment method for shale gas development, 2015.
[Online] Available through: <www.sciencedirect.com/science/article/pii/S2352854015000406> 6

INTRODUCTION
Awareness is essential either in business terms or overall knowledge terms. Earth is a
source of natural resources in huge quantity which sustainable use should be done by all in order
to save for the future generation. Deepwater Ltd is an energy procuring organization which is
concerned with corrosion and exploration of oil and natural gas from the earth surface and
providing the same to other companies for further refining of these natural resources. Deepwater
searches clues and explores those areas to extract oil and natural gas which could be used by
other companies for further process. In this report we would incorporate certain decisions as a
finance director at Deepwater to acquire a new business as well as to sell certain parts of
Deepwater so as to maintain strategic position.
1. BUSINESS STRUCTURE AND CORPORATE GOVERNANCE
Deepwater founded in 2006 is an energy exploration company which is now focusing on
acquiring MaxShale Ltd thereby planning to become a public limited company (plc.).
a) (i) Public and Private limited company
Basis Public Limited Private Limited
Meaning Owned and traded publicly
with at least 7 persons.
Traded and possessed by a
private owner having 2 min
members (Weisbach, 2018)
Prospectus and Invitation They are legally bound to
invite public to buy shares
through issue of prospectus
(Mawson and Haworth, 2018)
Private owners are debarred
from both the things
Start of Operations Only after receiving both the
certificates that is
commencement and
incorporation certificates.
Business could function with
only one certificate that is of
incorporation
Capital A minimum of £50,000 with at
least 3 directors.
No such limit is defined for the
private organizations.
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a) (ii) Deepwater's Advantages and Disadvantages of being a plc.
Advantages -
 If Deepwater goes into public it will have an advantage of limited liability and thus no
shareholder is liable for payment individually (Weisbach, 2018).
 A public limited company can easily raise capital from public through issuing shares by
listing on stock exchange or through debentures and bonds.
Disadvantages -
 Unnecessary expenses on issue of prospectus which is mandatory and regular auditing of
accounts and maintaining said regulations.
 Deepwater will face huge discrepancy in controlling of its operations as no top control
will be done in a public company.
b) Requirements of the UK corporate governance code for listing on London Stock Exchange.
Every public company needs to comply with the UK corporate governance code in order
to list their shares on London Stock Exchange (Weisbach, 2018). These are:
Leadership - Deepwater should incorporate a team of board to carry out major operations with
proper responsibilities in order to achieve long term success of the firm.
Effectiveness - Every person in the board committee of Deepwater should possess skills
experience and competency.
Accountability - Every risk should be calculated and assessed thereby making strategies for
managing risks by the board members at Deepwater.
Relations with shareholders - General meetings needs to be called by the board so as to
enhance relationship with Deepwater's shareholders thereby satisfying them.
2. THE ROLE OF MANAGEMENT
a) Role of new CEO at Deepwater.
CEO has a wide range of duties and responsibilities which needs to be fulfilled thereby
planning, organizing and decision making (Weisbach, 2018). The new appointed CEO at
Deepwater public limited will be responsible for making strategies with the finance as well as
operations department about the acquisition of MaxShale. Taking environmental analysis and
carry out cost structure to identify various changes and measures which needs to be taken as
Deepwater is now a public limited company thereby complying with corporate governance. To
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ensure that expenditures of the Company are within the authorized annual budget and making
strategies to manage risks (Mawson and Haworth, 2018).
b) Skills and Attributes required by a candidate
The candidate applying for the post of CEO at Deepwater public limited company needs
to have four major attributes and skills for the position (Weisbach, 2018).
Strong communication skills - A CEO is a leader who should have strong interpersonal
communication skills to motivate others to do the work in the right direction.
Building relations - Another ability that a CEO must have to work in a public limited company
is a strong influence over others is maintaining relationship with clients and suppliers. Deepwater
is an energy exploring company it needs to have strong bonding with its customers.
Optimistic - A CEO needs to have an Optimistic point of view as a leader he needs to motivate
his followers (Reich, 2018). A confident and ready to take up challenges behaviour is required
for the new CEO at Deepwater as it is a technical company.
3. PESTLE ANALYSIS OF SHALE GAS INDUSTRY
PESTLE analysis is considered to be as an effective tool that can be used by Shale
organisation for identifying the market situation and analysing the factors which have significant
impact or influence on business activities. There are several external or macro environmental
variables in business environment which has major influence on business operations. Pestle
analysis is the techniques which assist business entity in eliminating the negative impact of
external factors on business performance. Some of the constituents in business environment
which has major effect on the Shale Gas industry are:
Political factors: There has been great opposition by the political parties which has created the
major barriers in the achievement of success as well as growth by the shale gas industry. Political
parties in the country has not provided the supported to gas industry. Changers in the regulation
created by the political authorities have significant influence on the business decision as well as
strategy of shale gas industry. These factors are uncontrollable in nature. In addition to this
Geopolitical conflicts as well as Political Instability in the nation has significant effect on the
routing functioning of an industry. The presence of the large amount of oil and gas reserves in a
country can begin civil wars, and increase corruption
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Economic factors: These variables includes increase in tax rate, economic condition of the
country etc. Economic variables have significant effect on the financial performance on the
industry. These constituents also have great as well as significant influence on the demand and
supply of gas. Economic factors also have effect on the profitability of industry.
Social factors: These variables have significant effect on business activities of shale gas industry.
As many people in the nation opposed the development of the gas industry. As people perceives
that emission of the large amount of gases have negative effect on their health as well as on
environment. In addition to this Increasing awareness and focus on more friendly fuels as well
as decline in the usage of “dirty” fossil fuels such as oil sands, coal, and shale gas.
Technological factors: The technological forces has supported an industry in increasing the
production as well as improving the quality of fossil fuels. But the some technologies are banned
by the legal authority.
Legal factors: Shale gas is not at all getting the support of government. It has become
challenging for an industry to maintain or increase its sustainability in highly competitive
environment (Du, Bhattacharya and Sen, 2010)
Environmental factors: Shale gas exploration and production process may become air pollution
source. Atmospheric emissions may come from shale gas burning and blow off and the
transportation vehicle gas emission this may lead to the environmental pollution , due to which
company might has to face legal obligation.
4. Corporate social responsibility and communication with customers
A. 1)Corporate social responsibility
Corporate social responsibility is considered to be as business approach which plays
significant role in contributing to sustainable development by delivering economic, social and
environmental benefits for all stakeholders. Objectives of corporate social responsibility is to
ensure that an organisation conduct their business in a manner that is ethical.
A) 2. Three things that a company should do to ensure that gas industry should do to ensure that
they behave as good corporate citizens
The most important activity is that an organisation is required to take the responsibilities
of the consequences which has taken place due to its business activities.
Another thing is the companies operating in oil and gas industry should participate in the
programme or events which are organised for the welfare of the society.
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Business entities required to taker high initiatives to assess and take obligation for the
company's effects on environmental and social well-being (Carroll and Shabana, 2010).
B) Identifying three ways s in which the fracking industry could communicate with potentially
hostile stakeholders
Local communities: The fracking industry can communicate with public using advertising
techniques, organising camp, using the social media sites etc.
Government: The fracking industry can communicate with government through written
communication.
Shareholders: In order to interact with the shareholders' management team in an organisation can
call meeting. Other communication channel which can be used for facilitating communication
with stakeholders are via main, telephonic conversation etc.
Environmental groups: By presenting the report of ethical practices and informing them about
the objective of an industry. (Gainer, 2010)
CONCLUSION
It has been concluded from the report that there are several advantages as well as
disadvantages of Deepwater of being a plc. Project has also concluded that there are some legal
requirements to be fulfilled in terms of UK corporate governance code that is applied to
companies listed on the London Stock Exchange. It has also been articulated from the
assignment that management plays a significant role in driving firm towards objectives. Manager
also makes a significant contribution in supporting business entity in overcoming the complex
situations.
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REFERENCES
Books and Journals
Carroll, A.B. and Shabana, K.M., 2010. The business case for corporate social responsibility: A
review of concepts, research and practice. International journal of management
reviews. 12(1). pp.85-105.
Du, S., Bhattacharya, C.B. and Sen, S., 2010. Maximizing business returns to corporate social
responsibility (CSR): The role of CSR communication. International Journal of
Management Reviews. 12(1). pp.8-19.
Gainer, B., 2010. Corporate social responsibility. In Third Sector Research(pp. 187-200).
Springer New York.
Mawson, M. and Haworth, A. C., 2018. Supporting the employability agenda in University
Libraries: a case study from the University of Sheffield. Information and Learning
Science. (just-accepted). pp.20-40.
Reich, P. L., 2018. What Happened to Hispanic Natural Resources Law in California. Cal. Legal
History. 13. p.43.
Weisbach, M. S., 2018. Outside directors and CEO turnover. Journal of financial Economics. 20.
pp.431-460.
Online:
A comprehensive environmental impact assessment method for shale gas development. 2015.
[Online]. Available through:
<www.sciencedirect.com/science/article/pii/S2352854015000406>.
Shale Gas ExploitationEconomic Effects and Risks. 2015. [Online]. Available through:
<12567115002312/1-s2.0-S2212567115002312-main.pdf?_tid=2f143d9f-5dc2-4abe-
be28-a4d5e0b915c4&acdnat=1524894310_27221180dd0505781f2f80614b71df54>.
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