Deepwater Horizon Oil Spill and Offshore Drilling: Lessons for Future Operations Managers

This report discusses the Deepwater Horizon Oil Spill and Offshore Drilling case with the help of concepts such as organizational structures, culture, engineering risk, risk management, systems engineering. It highlights the flaws in the organization structure, organization culture and the risk management process of BP that led to such a devastating disaster. The report provides useful lessons for the future oil drilling projects.

Project Management
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Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Conclusion..................................................................................................................................9
References..................................................................................................................................9
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Introduction
Operational failures occur in several organizations across all the industries. The operational
failures have consequences of minor inconveniences to some of the major catastrophes. One
of such catastrophe was the Gulf Oil Disaster. On April 20, 2010 an explosion tore in the
Deepwater Horizon drilling. Once the drilling of Macondo well deep under the waters was
completed the economic, human, and the environmental disaster began (Wolf & Mejri, 2013).
The explosion led to the death of 11 crew members along with severely injuring others. The
disaster had its scope over the week as the four million barrels of oil was gushed
uncontrollably along with threatening the precious habitats and livelihoods of the people. The
case of Deepwater Horizon Oil Spill and Offshore Drilling offers number of lesions for the
future operations managers that can be used for preventing such disasters. (National
Commission on the BP Deepwater Horizon , 2011).
This report will focus on understanding the important concepts and theories such as the
organisational structures, culture, engineering risk, risk management, systems engineering
with the help of Deepwater Horizon oil spill and drilling case. The investigation report of the
disaster indicated that this disaster was preventable if progressive guidelines and practices
were followed.
Discussion
Systems engineering
System engineering is one of the effective approaches that help in realizing successful
systems. It is a robust approach that is used for creating, designing and operating the system.
System engineering can also be termed as the collaborative approach when number of
disciplines is working together. The Macondo well project was one such project that involved
number of disciplines (Aronson, 2017). This project involved a system thinking that can be
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referred to as a holistic approach in different parts of the system work together to achieve the
overall objective of the project. There are seven major parts involved in the system
engineering. These seven parts are discussed below:
Source: (Sebokwiki, 2017)
In order to ensure that a system works efficiently it is essential for all of its parts to work in
coordination towards the actual goal. In this case of Macondo well project there was an
absolute failure oaf system thinking model. This is because each of the parts of the system
was working is a different direction.
The organization structure can be defined as the activities associated with the activities
such as the coordination, task allocation and the supervision that are directed towards an
organizational objective. Organizations now need to be flexible, innovative and efficient
enough so as to operate effectively in a complex environment along with achieving a
competitive advantage. There are number of theories associated with the organizational
structures such as Neoclassical Organization Theory, classical organization theory and the
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system theory. One of the organization structure theories that can be applied in the case of BP
Deepwater Horizon Oil Spill and Offshore Drilling is the system theory. According to this
theory of organization structure the parts of an organization are interrelated. The failure of oil
spill and offshore drilling negatively affected all the parts of BP (Ingersoll et al., 2012).
Further the case analysis indicated that the organization structure of BP was not effective as
there was a lack of effective communication, leadership and the procedures. The Macondo
disaster is the result of both the technical failure and the failure of the management. There
were conflicts and confusion between the managers about who was accountable for the
critical decision making (Goldenberg, 2010). Further there was not effective communication
as the critical information was not communicated to the well sire engineers (Roberts, 2011).
Organizational culture encompasses the behaviour and values that contribute the overall
psychological and social environment of the organization. Tanase (2015) also stated that
organization culture is one of the important aspects that has an impact on the success or
failure of an operation. Fleury (2009) has also defined organization culture as the pattern of
basic shared assumption that by learnt by a group for the solving the problem. The culture of
the organization is important in terms of teaching the new members the correct way of
thinking, perceiving and acting in relation to the problems (Lehman, 2010).
There were major flaws in the organizational culture of BP that led to a huge operational
failure or a disaster. The flaws in the organizational culture of BP can be demonstrated with
the help of a fact that there was a lack of a culture of leadership responsibility. Being one of
the biggest companies in the area of oil and gas the organization culture the focus of BP
should be on creating an organizational culture in which individuals take ownership of the
safety issues with a determination. Further, the disaster was preventable if BP had a
functional safety culture. (Desson & Clouthier, 2004). BP had an organization culture with
incentives on an increase in the productivity but there was no increase in the protection of the
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workers (Cholan & Makin, 2013). The lack of functional safety culture had a major impact
on the balance between protection and production that further affects the barriers that can be
used for preventing the failures. Therefore it can be said that BP needs to develop a safety
culture by maintaining a balance between production and protection (Roberts, 2011).
Engineering risk can be defined as the effect of flaw or the deficiency in the engineering or
the design of the project. The engineering risks are also known as the design risks. (Kremljak
& Kafol, 2014). There were number of design or the engineering risks involved in the
explosion of Macondo well. The engineering team was involved in making number of
decisions related to the design of the well. The engineers at the site made the decisions that
complicated the cementing resulting in the explosion disaster. For example engineers decided
to install the rupture disks in the well; they decided to avoid the trapped annular spaces etc.
The explosion of Macondo well was the result of multiple actions. There was complex and an
interlinked series of judgements, human failures, and engineering design risks and the team
interfaces. There were many engineering risks involved in the Macondo well project that
resulted in the explosion of the well. The engineering decisions taken by the engineers of BP
increased the overall risk of cementing failure (Larsen, 2017).
Proper risk management in the complex projects such as the Macondo well project requires a
constant awareness of all he potential risks involved in the project. Risk management utilizes
the strategies and approaches or the barriers that can address likelihood as well as the
consequences of the failure (Kielland, 2011).
Deepwater drilling is one of the most challenging and risky task. The companies involved in
the risk assessment in Macondo failed to analyze the risks along with developing the risk
mitigation plan. This further resulted in a biased decision making in context of saving time
and money along with increasing the risk of blowout.
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There was an improper risk management in the Macondo well project as one of the simple
approach decision tree was used for evaluating the cement. The decision tree encouraged a
simple linear approach in which the complex risks such as the failure in the cementing was
forgotten because of the incomplete indicators (Bea, 2011).
Further in the Macondo well project the uncertainties, hazards and the risks were not
identified and managed (Houck 2010). The requirements to prevent the blowout were waived
out. The consequences associated with the blowout were insignificant. The likelihood and
consequences of the failures were underestimated. As a result, the emergency responses,
preventive measures, cleanup process was significantly inadequate (Wellintegrity, 2011).
Project management principles
Project management can be defined as the practice associated with initiating, planning,
executing as well as controlling the work so as to achieve a specific objective or goal. Project
management is one of the composite activities with number of dimensions. The complexity
of the project depends on the class and level of the project. In essence it can be said that
project management is the discipline associated with the planning, organizing, managing,
leading and controlling the organizational resources (Wideman, 2009).
A successful project follows some important project management principles that are listed
below: Structure of the project, project definition, risk recognition, clear goals, transparency
in status of the project, responsibility of the project manager, and success of the project
(Little, 2011). Macondo well project was one of the most important and complex projects that
did not fulfil many of the principles of project management. This led to the failure of the
project and making it a huge disaster (Cholan & Makin, 2013).
Communication is one of the most important aspects of project management as it helps in
creating transparency and clearing the goals and activities essential for the completion of the
project. There was an inadequate communication that contributed to the blowout (Mustaro &
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Rossi, 2013). The decision makers and the engineers at the site did not communicate at the
site leaders who were responsible for making the decisions (National Commission on the BP
Deepwater Horizon , 2011).
There was a lack of clear, timely and detailed procedures to the site leaders and the crew
involved in the project. The team of BP‘s onshore Macondo was however rushing to provide
the procedures and design the operations on the rigs. As a result the employees on the rig wee
not informed about the upcoming operations. There were number of problems associated with
the risk management process used by the BP’s project managers and the engineers. An
ineffective risk assessment process has led to wrong decision making that led to the project
failure. There was no formal process of risk assessment that led of delayed decision making.
The risk management process was inefficient, the decision were taken in isolation rather than
considering the overall impact of the solutions on the project (Roberts, 2011).
The above discussion highlights the fact the Macondo project failure can be attributed to any
one of the factors or the actions. There are number factors associated with the same and these
factors have been identified in this essay. Starting from the organizational structure of BP,
the structure of the organization was not effective enough to promote open communication
among the managers and the workers. The structure of the organization was complex in
nature that further created confusions and conflicts between the people involved in the
project. All these factors have a significant negative impact on the organization culture of BP.
The focus of such a big oil drilling company should have been on the maintaining a safety
culture but the organization focused on offering the incentives and improving the productivity
with increasing the safety measures and practices for the workers. A lack of safety culture in
the organization further led to an inefficient risk management system. The risk assessment
process of the organization focused on saving the cost and time with the help of simple
evaluation techniques such decision tree.
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Conclusion
The Macondo blowout was one of the disasters that led to the loss of people, financial losses
along with severely affecting the environment. The essay above has focused on the BP
Deepwater Horizon Oil Spill and Offshore Drilling case with the help of concepts such as
organisational structures, culture, engineering risk, risk management, systems engineering.
There were number of technical and non-technical factors that were associated with the
blowout. The easy has however focused on the non-technical factors associated with the
Macondo blowout. There were some major flaws in the organization structure, organization
culture and the risk management process of BP that led to such a devastating disaster. It is
important for BP and other on drilling companies to develop a safety culture so that the
overall safety of the workers and projects can be ensured. The major focus of the companies
should be on increasing the safety rather than the productivity of the organization. This case
has provided number of useful lessons for the future oil drilling projects. All the sub systems
of an organization need to work together to successfully complete a project.
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