Strategic Asset Management: Analysis of the Deepwater Horizon Disaster

Running head: STRATEGIC ASSET MANAGEMENT
STRATEGIC ASSET MANAGEMENT: ANALYSIS OF THE DEEPWATER
HORIZON DISASTER
Name of the Student:
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Author’s Note:

1STRATEGIC ASSET MANAGEMENT
Table of Contents
1.0 Introduction.....................................................................................................................2
2.0 Overview of the concept of asset management in engineering setting...........................2
3.0 Benefits of the process of asset management in engineering setting..............................4
4.0 Deepwater Horizon disaster of 2010...............................................................................5
5.0 Strategic Asset Management Plan for British Petroleum................................................7
5.1 Risk Management Plan....................................................................................................7
5.1.1 Risk Identification.....................................................................................................7
5.1.2 Risk Mitigation Plan.................................................................................................8
5.2 Operations Plan..............................................................................................................10
5.3 Equipment or Asset Maintenance Plan..........................................................................10
5.4 Asset Recapitalization Plans and Strategies...................................................................11
5.5 Asset Capital Planning and Strategies............................................................................11
5.6 Asset Disposal Plan........................................................................................................12
6.0 Conclusion.....................................................................................................................12
7.0 References.....................................................................................................................13

2STRATEGIC ASSET MANAGEMENT
1.0 Introduction
As opined by Byrne (2016), the primary focus of the different modern business
enterprises is on the enhancement of their annual profitability and the resultant effect of this
is that take the help of different kinds of machineries, equipment and others to facilitate the
manufacture of the goods or services offered by it. Campbell, Jardine and McGlynn (2016)
are of the viewpoint that the advancement in the technological as well as the engineering
fields have greatly improved the quality of the machineries or for that matter the equipment
which are being used by the contemporary business enterprises. As a matter of fact, it had
been noticed that the effective usage of the modern machineries, equipment and other kinds
of tools had greatly reduced the operations cost of the business enterprises while enhancing
the quality as well as the quantity of the goods or the services offered by them (Hastings
2015). This in turn had helped the contemporary business enterprises to maximise their
profitability and it is on the score of these aspects that these machineries, equipment, tools
and others which are being used by the enterprises are commonly referred to as assets of the
enterprises (Gârleanu and Pedersen 2018). However, the major problem arises because of the
fact that despite the plethora of the benefits that the different assets which a particular
business enterprise boasts of offers to the concerned enterprise yet no additional measure is
being taken by the enterprises for the effective maintenance of these assets or for that matter
for the prolongation of their life cycle (Zambrana and Zapatero 2017). The purpose of this
report is to analyse the concept of asset management and propose a strategic asset
management plan for the enterprise British Petroleum in the light of the Deepwater Horizon
disaster of 2010.

3STRATEGIC ASSET MANAGEMENT
2.0 Overview of the concept of asset management in engineering setting
Kashyap et al. (2018) have articulated the viewpoint that asset management can be
defined as a systematic or a scientific approach for the governance or the maintenance of the
different tangible or the intangible assets of an enterprise. Likewise, Gârleanu and Pedersen
(2018) have stated that the asset management can be seen as the process through which the
business enterprises develop, operate, maintain, upgrade and finally dispose the assets which
have completed their life cycle in a cost-effective manner. On the other hand, Nenonen and
Storbacka (2016) have noted that the primary objective of the process of strategic asset
management is to maximise the life cycle of the different assets of an enterprise and thereby
to derive the maximum amount of benefit from the concerned assets during the entire life
cycle of the asset. In this regard, it needs to be said that the different assets of the business
enterprises can be segregated into two categories, namely, the tangible assets and the
intangible assets (Omeje 2017). The different physical objects that an enterprise holds like
physical space or building, machineries, equipment, tools and others belong to the category of
the tangible assets whereas the entities like goodwill or brand image, financial assets,
intellectual capital, human capital and others belong to the category of the intangible assets
(Perrons and Jensen 2015).
Cannizzaro and Weiner (2015) are of the viewpoint that the process of asset management
becomes an integral one within the spectrum of the business operations of the enterprises
which heavily rely on the engineering setting like petroleum drilling companies, mining
companies and others. As opined by Gilchrist (2016), this can be explained on the basis of the
fact that this genre of enterprises require the extensive usage of large as well as costly
machineries, equipment, tools and others which are integral to their business activities or the
goods or the services that they manufacture and often prove to be very difficult to maintain or
service. The resultant effect of this is the fact that these enterprises have to dispose the