The Effects of BP Oil Spill

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Introduction The Deepwater Horizon was a dynamically positioned drilling rig which owned by Transocean and it was chartered to BP from 2008. On April 20, 2010, the offshore oil rig exploded, the explosion was the largest accidental marine oil spill in the history of the petroleum industry as the oil leaked 205.8 million gallons of crude oil into Mexico Gulf Coast and BP spent 86 days to cap the well, stopping the oil flow into Mexico Gulf for the first time. This report covered some facts about the BP oil spill scandal and its influence to stakeholders. The article also includes the analysis of oil spill from accounting, legal, ethical and corporate governance aspects. Furthermore, a comparison between The BP oil spill and Enron scandal is for analyze the similarities and differences of these two cases, and explore any improvement and change on legislation, accounting standards, code of conduct etc. The purpose of this report is reveal to directors what did BP do wrong in the past and what aspect the firm could do better in the future. Facts relating to BP’s Gulf Oil Spill Scandal On April 20, 2010, an explosion occurred in the Gulf of Mexico, on the Deep water Horizon oil drilling rig which rented by BP. There were 126 workers on board at the time of the explosion. Fifteen of them were injured, and eleven died. Two days later the oil drilling rig sank, the leaving oil spewing into the Gulf. This was the largest marine oil spill in the history of the petroleum industry, the oil had been leaking for almost three months. The accident investigation indicated that BP focus on cost-cutting and high production caused the serious deterioration of safety regulations at the refinery. The spill resulted from the company’s fail... ... middle of paper ... ...health problem from oil and BP shareholder lawsuits etc. However, BP didn’t assume responsibility even though the investigation indicated BP had most mistakes. As the firm shirked responsibility with other companies, BP didn’t show an ethical corporate culture. Compared with Enron scandal, BP didn’t do any fraud or false accounting. However, as both of these companies claimed that the company’s conduct code is compliance with government and safety regulations, their company scandals revealed that the company didn’t comply with profession ethics, even the regulations. Against Enron scandal and The BP oil spill, several regulations were published, such as Sarbanes-Oxley Act, Restore Act and so on. These new legislations effectively control the company’s unethical and illegal behavior, also good for the prevention of the similar company scandals’ happen in the future.

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