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  • We have carried out a longsteep to cover the issues locally, nationally and globally that BP face.But we have picked out the 2010 oil spill in the Gulf of Mexico as the most impacting issue that BP have had to face recently and how the core functions worked to protect the company. Our core function sections will cover how each function dealt with the oil spill, and any other issues that they have to face. We will show the integration between the functions and who BP are currently and hope to work with in order to deal with issues raised. We will then consider the future of the organisation and any recommendations we can make about the future of dealing with issues addressed in the longsteep. We will also consider how our response may have been different had BP been in the alternative sector.
  • Jamie will now go on to talk to you about the products and services BP provide with the impact the external environment has, and we will then dicuss in more detail, the impact of the oil spill on other core functions.
  • From our longsteep, crude oil is the worlds most actively traded commodity.
  • Which is the process for the conversion of sugars into biodiesel which they aim to bring this to market within 5 years.
  • – “Operations transform resource or data inputs into desired goods, services, or results, and create and deliver value to the customers” is the basic definition of the operations function. BP have stated that the function “plan our use of assets and ensure maintenance schedules are maintained. Operations is the backbone of a global energy business – and the key to turning our resources into products that meet the increasing demand for energy” (BP, 2011). The function ensures that the inputs are transformed into a good, service or result that creates value for the customer. If maintenance schedules are maintained and the resources that BP use are turned into products that meet customers wants and needs, value can be created for the customer. Working for operations in BP are around 6000 people, who are a vital aspect of the company as these people are involved in the delivering oil and gas to the market and all staff play a significant role in the exploration and production cycle. The function is involved at the beginning of the project all the way through to full production. However, this core function has difficulties in terms of the transportation of machinery, in order to make the finished products, as it needs to to be moved between sites, but is not always permitted across borders due to legal constraints, as mentioned in our longsteep.
  • We will now consider the oil spill as our main implications on BP within the core functions.
  • - The oil rig construction began on 1st December 1997 in South Korea. On 18th July 2010 BP told the owner of Deepwater Horizon rig to overhaul blow-out preventer, a crucial safety device. Device subsequently failed to activate. These actions undertaken by the operations function led to the oil spill and the devastation that followed. According to the Telegraph (2011) BP is budgeting for maximum final costs of $41bn to settle fines, compensation and clean-up operations.BP have been heavily involved in the clean-up operations in the Gulf of Mexico. They worked closely with the Governmental agencies and peer companies to clean up the devastation caused by the oil spill. On 19th September 2010 the US coast guard confirmed that the well kill operations undertaken to contain the oil leak were successful and complete. -The Presidential commission in January, 2011 found that the “oil spill was an avoidable disaster caused by a series of failures and blunders made by BP and its partners, including Transocean and Halliburton, and government departments assigned to regulate them, the panel concludes. It also warns such a disaster would likely recur because of industry complacency.” If BP want to avoid another disaster on this scale, their operations function will have to ensure that failures do not happen and communication between partners is taking place all of the time.
  • This is part of their plan for change, where they aim to be more responsible with their actions.Getting more employees to avoid stretching current employees, with operations excellence. Now it is a rule that teams can shut down operations if they think they are unsafe. Power has gone to the employees.
  • The drilling at the start began as a project, but also the crisis and cleanup was a project.
  • A plan was drawn up before the crisis occurred to say that nothing would occur on such a large scale. However, the plan had flaws and did not cover the impact of the actual crisis. Where their drilling projects are at the moment.Constantly project capability
  • That’s one of the biggest talent pipelines in the world.And when a business has operations across six continents, that guidance and support has to be powerful enough to deliver commercial goals.From this HR can respond quickly and effectively to the fast-changing energy industry. Their plans and policies help equip our people for their roles – from drilling deeper wells to delivering clear financial reporting and promoting safer transportation policies.
  • This emphasises the need for extra employees to avoid overstretching. However, it could be said that more employees were needed during the drilling to ensure all safety precautions were met.
  • within the UK such as looking at whether they are giving graduates the inspiration they need to become business leaders BP issued a statement on the their future and of the industry after the oil spill. This can be achieved by developing world-class training programmes, and anticipating the demand for new skills. And when it comes to HR policies and procedures, they help create a culture of mutual respect. In short, HR drives BP’s performance - on a global scale.
  • This is seeing the business from the customer’s point of view. The marketing department is the face of the organisation.Marketing function analyses the outside environment and it’s impact on the organisation.It does this through its market research which helps it determine impacts of external issues on the internal aspects of the organisation. Marketers must understand the size and nature of the marketplace in which it operates. Any changes in the external environment need to be considered in terms of the effects they will have on the strategic and operational management of the organisation.Functional convergence is the close collaboration and communication within and between departments in an organisation which helps ensure objectives are met.These could be plans for the newest aviation fuels, a strategy to increase sales of materials used to manufacture recyclable plastic bottlesTo keep up with products as diverse as BP’s, the marketing teams stay focused on the future. Help them to understand what our customers want – and that’s absolutely essential to understanding how global demand will grow.Marketing helps BP to keep pace by making sure they have the right products for the right customers in the right places
  • The marketing department had to ensure the face of the organisation was available to see at all times during the oil spill. It did this by dedicating a section of its website to the Gulf of Mexico oil spill and by ensuring it’s was up-to-date with recent activities regarding the cause, clean-up and costs etc. Google searches are directed to the company website to make their daily documentation more visible. (Guardian, 2010)On 30th April 2010, Tony Hayward, BP chairman, said that the firm eill take full responsibility, paying for all legitimate claims and cleanup. It is the job of the marketing department to ensure that this information is spread throughout the other functions so they are prepared to deal with incoming claims etc.The fallout from the Deepwater Horizon spill results in BP being left off an index of the top 100 brands compiled by Interbrand, a major marketing consultancy, for the first time in 11 years. The spill will have had a massive impact on the reputation of the brand and its consideration of the environment and its responsibilities (Guardian, 2010). The company reputation took massive hit with recordings of £3.1 billion loss as well as a nose dive in shares.
  • BP commissioned a series of adverts to repair its image as anniversary loomsThe text in the ad includes: “This was a tragedy that should not have happened. Our responsibility is to learn from it and share with competitors, partners, governments and regulators to help ensure it never happens again”. The move follows a huge advertising campaign in the follow up to the disaster which saw the company spending $5 million a week in America alone in a bid to repair its image (UK marketing news, 2010)
  • This element is not part of the organisation’s internal environment, so is harder to manipulate than the other elements of the marketing mix. The consideration of people in the marketing mix reflects the importance to successful marketing of both the person who is the customer and the person doing the selling. BP need to consider how their marketers communicate with potential and actual customers in light of their views and opinions on the recent disaster. There is a crucial relationship between marketing and HR departments to ensure the right people are employed to do the selling. BP will effectively be selling their brand back, not just their products.
  • Jobs at BP: Ours is an industry that’s constantly changing. Global markets literally shift over night. New companies are acquired and old wells are shut down. Discoveries need to be assessed, new technologies funded and strategies agreed. It’s our finance professionals that ensure we’re able to keep pace. That’s why we offer outstanding opportunities to develop, progress and see your aspirations grow. (BP, 2011).Internal and external factors: The company’s accountants work half way around the world and their software looks … entirely unique. The local tax structure is equally new and complex. Challenges emerge from every corner. But since BP embeds finance professionals in every part of the organisation, expert advice, sound strategy and efficient processes are exactly where you need them – close at hand. (BP, 2011)
  • BP agrees to pay $20bn downpayment towards compensation costs, and cancels dividends for the year (Guardian, 2010).Asks Anadarko and Mitsui Oil Exploration to contribute $400m. (Guardian, 2010).Over the period of time, the cost of the oil spill rose from an estimated 3bn to 40bn,Now bp are recovering from the costs of the oil spill and share prices are rising.
  • Therefore there will be an increased need for BP’s explorations services and more fluctuations in price, as oil becomes more and more finite. As mentioned in our longsteep. This will have an impact on the cost prices of oil to consumers.
  • Information in this industry is everything, such a high demand for oil, coal and gas. This industry is a secure one for keeping information safe. With the currency being in the trillions, It is smart to keep security tight. In many cases, BP will need to send employees into dangerous places to carry out tasks and in these times not only physical saftey is required e.g armed guards. But specific information regarding what they may be doing, when, with who and where needs to be safe and not open to the wrong people. To gain access to the regular intranet system you need a password and for each individual employee, there will be more information that is required to hand over in order to access more information. Specific projects also have their own security net.
  • GreenSky will convert more than 500,000 tonnes of waste biomass material that would have been destined for landfill sites into synthesis gas (BioSynGas) every year, using Solena’s proprietary plasma gasification technology. The BioSynGas will then be processed by Rentech’s F-T technology into jet fuel.  The plant will also export more than 20 megawatts of baseload renewable power to the grid after supplying the entire facility with clean electricity.This also shows that in a way BP has not learnt from what happened in the Gulf of Mexico and the degree at which fuel distributers are tapping the finite resources in the Earth’s crust.FOSSIL FUEL: A general term for buried combustible geologic deposits of organic materials, formed from decayed plants and animals that have been converted to crude oil, coal, natural gas or heavy oils by exposure to heat and pressure in the Earth’s crust over hundreds of millions of years.
  • Finance will be incorporated into all functions. HR is also involved in all functions in terms of having the right people in the right places at the right time, even in a crisis situation.And will also have implications for future strategic policies.
  • This can be done through their marketingBecause energy consumption is increasing but sources of conventional energy is decreasing. There are a lot of alternatives coming outHowever, BP brand is still the 3rd most powerful brand in the world (HR slide) despite their recent mistakes. Haven’t lost their market share, and haven’t hidden away from the blame.
  • Because they would be controlling the resources to neighbouring countries instead of utility companiesBecause they would be part of defence and attack, so could bring up politic instabilityRather than trying to cover your corporate image
  • Through stricter operations and more employees spread over the projectsSuch as Martek. Their list of projects are getting longer.
  • Check all references and see if any are the same!!
  • Find druckerreferemce
  • Presentation

    1. 1. Alex HamidPatrick HatcherKirsty HollandClare HuntRebecca JonesTimothy MasonJamie McGuiganKieren Milne
    2. 2. • About BP• Products and Services• Core Functions• Integration of core functions• Recommendations• Recommendations in alternative sector• Conclusion• References
    3. 3. About BP‘BP is one of the worlds leading international oil and gas companies,providing its customers with fuel for transportation, energy for heat and light,retail services and petrochemicals products for everyday items’Our history is full of discoveries, starting in 1908 with oil found in a ruggedpart of Persia after a long and difficult search. Since then, discoveries largeand small (and sometimes just in the nick of time) have fuelled our progress.What we do:• Find oil and natural gas• Extract it from hard to reach places• Move it from land to sea• Make useful products from it• Also generate low carbon power• Try always to work safely and responsibly• Building construction facilities
    4. 4. Product and service development
    5. 5. Future Product & Service DevelopmentArtic Exploration in Russia• Potentially a very lucrative place for oil.• BP had plans to share swap with Roseneft.• AAR objected saying it broke an existing contract.• A new plan agreeable to both AAR and BP has been drawn up.• Currently waiting for word back from Roseneft.Making biodiesel from sugars• Aim is to create Sugar-to-diesel technology.• Joint development with Martek Biosciences Corporation.• It has the “potential to deliver economic, sustainable and scaleable biodiesel supplies” (BP, 2011).
    6. 6. Operations• “Operations transform resource or data inputs into desired goods, services, or results, and create and deliver value to the customers.”• “They plan our use of assets and ensure maintenance schedules are maintained. Operations is the backbone of a global energy business – and the key to turning our resources into products that meet the increasing demand for energy” (BP, 2011).
    7. 7. Operations and the Oil Spill• The oil rig construction began on 1st December 1997 in South Korea.• On 18th July 2010 BP told owner of Deepwater Horizon rig to overhaul blow-out preventer, a crucial safety device. Device subsequently failed to activate
    8. 8. The Future of Operations• Stricter operations in the future• Developing Operating Management System (OMS)• A six point plan including Control of Work and Integrity Management Standards (BP, 2011).
    9. 9. Planning and project management• Project management is the planning, organizing, directing and controlling of company resources for a relatively short- term objective that has been established to complete specific goals and objectives.(Kerzner, 2009)
    10. 10. Project Management and the Oil Spill• Contingency plan drawn up to deal with any oil spills• “due to the distance to shore (48 miles) and the response capabilities that would be implemented, no significant adverse impacts are expected” (BP, as cited in The Guardian, 2010)• Crisis planning must be intensive and rigorous• 86 major projects across 26 countries
    11. 11. HR• BP has almost 80,000 employees.• HR professionals act as business partners. Some deliver strategic guidance. Others support the day-to-day needs of managers and employees.• Efficiency holds the key to what HR can achieve and BP invests in systems, data and core processes like governance, policy and compliance.
    12. 12. HR and the Oil Spill• Brought in 48000 people, trained 100000 people in readiness to support response, contracted 11000 vessels to help clean up the oil spill and to stop it.• No Bonuses for BP executives involved in the Oil Spill – Bob Dudley the chief executive will also miss out on a bonus payment as well as his predecessor and BP’s former head of exploration and production.
    13. 13. Other HR commitments and the future• BP also focuses on the future employees• "We want to attract people with ideas to prevent this [sort of] incident happening. From a personal ambition point of view of anyone thinking of career in the industry, these are the challenges that we want people to be able to prevent and deal with.“• HR professionals have to put together the plans that will recruit, retain and reward people who can keep BP ahead of the global energy challenge.
    14. 14. MarketingMarketing is “the whole business seen from thepoint of view of the final result” (Drucker, 1954).Marketing at BP:• Marketing teams complete research, formulate plans and deliver communications that make the brands and products stand out• Working in a very competitive global marketplace (BP, 2011 [online])
    15. 15. Marketing in oil spill• The face of BP during the oil spill• Taking responsibility• BP loses brand reputation• Release of adverts for anniversary of Oil Spill
    16. 16. (UK Marketing News, 2010)
    17. 17. Future of marketing for BP and other implications for marketing functions• BP may have to have more concentration on people element of marketing mix.• BP have to be able to answer questions regarding the future of oil and how they plan to sustain the market.
    18. 18. Finance• Finance has to link to every other function in the business because everything that is done costs money.• It is down to the financial departments in BP to decide whether the business can afford to do certain things, such as new projects.
    19. 19. Finance and the Oil Spill• By law, BP could face fines up to $17.6bn for the 4.1 million barrels spilt. (Telegraph, 2010).• Compensation costs escalating, BP’s facing a bill of up to $34bn. (Guardian, 2010).• Shares in BP rise by 8p a day.• Estimated cost of oil spill rises to $40bn. (Guardian, 2010).• 2011 – BP recovering from the oil spill, with their share price rising. (Guardian, 2011).
    20. 20. Other Financial Implications for BP• The world demand of oil is forecast to grow.• Since the Libyan civil unrest first broke out, Brent crude oil had risen from around $80 to over $120 a barrel before the recent sell-off
    21. 21. IT Present day BP and their IT functions.• It is important that BP and any other Oil distributing company keeps their files secretive. While allowing the public to see everything they need to assess the strength of the business.• Being able to distribute oil holds a lot of responsibility as oil is a lifeline to nations, companies and people all over the world.
    22. 22. The Future of BP• In the event of lack of oil in the future all the utilities companies will be dependent on different sources of energy.• Other oil companies such as Fluor Daniel are investing in a new biofuel scheme called Greensky.• BP is working with the ongoing use of liquid gas. This liquid gas makes fuel easier to transport and more efficient to store.
    23. 23. Strategic development and policy• Martek and BP create Joint Development Agreement (BP, 2011).• “I always saw it as greenwashing, as it has proven to be," says Seattle-based environmental activist Fred Felleman” (Deneen, 2010)• BP recognises the worlds growing need for energy and aims to produce it affordably with minimum impact on the planet, without damaging the environment
    24. 24. Strategic Development and the Oil Spill• - Contain it on the surface• - Dilute and disperse it into less sensitive areas,• - Remove it from the water.• Commits up $1 billion to projects that will restore the Gulf. Spent $17.7 billion as of Dec 2010.
    25. 25. Today and into the Future of Strategic Development• 2011 March – Plans to acquire majority control of Brazilian ethanol and sugar producer CNNA• In the next 50 years the global population will grow by at least 60%. To stand still in unit terms, global gross domestic product must also increase by 60% by 2050
    26. 26. The Integration of Core Functions• Products and services require marketing to be determined.• Operations will have an implication on future projects and the process of current ones.• Information Technology links into the development of new products and services.
    27. 27. Recommendations• BP need to repair their image with the rest of the world• BP need to start looking into diversifying their market
    28. 28. Recommendations if in the Public SectorAnalysis:• More of a matter of geopolitics• More global and national, rather than localEvaluation:• Functions would be biggerRecommendations:• More about talking to the public
    29. 29. Conclusions• Currently working towards making sure another disaster doesn’t occur• They are currently merging with environmentally conscious firms to improve their image• BP have one of the most diverse development portfolios in the world• The oil industry will have to consider the implications of consumers view on the environmental impact of oil exploration
    30. 30. LoNGSTEEP References• BBC News (2007) Oil Markets Explained, 18th October [online], Available from: [accessed: 12/05/11]• BP (2011) BP in Pakistan [online], Available from: [Accessed: 12/05/11].• BP (2011) Changing Minds, Changing Attitudes [online], Available from: [Accessed: 12/05/11].• BP (2011) Late Century [online], Available from: [Accessed: 12/05/11].• Hutton, W. (2011) The country needs an economic vision, but who will provide it?, The Guardian Online, 8th May 2011 [online], Available from: wrong [Accessed 12th May 2011]• Knight, L. (2011) Commodities plunge: Blip or turning point?, BBC News Online, 6th May 2011 [online], Available from: [Accessed 12th May 2011].• Marcus, J, (2011) Libya stalemate leaves NATO without Plan B BBC News Online, 11th May 2011 [online], Available from: [Accessed 12th May 2011]• OPEC (2011) Monthly Oil Market Report [online], Available from: _April_2011.pdf [Accessed: 12/05/11].
    31. 31. Product and services references• BBC News Online. (2011)BP moves closer to Arctic exploration in Russia, BBC News Online, 6th May 2011 [online], Available from: [Accessed 12th May 2011].• BP Website. (n.d.) Biofuels for the future, Making biodiesel from sugars, [online] Available from: [Accessed 12th May 2011].• BP Website. (n.d.) BP at glance, [online] Available from: [Accessed 12th May 2011].• BP Website. (n.d.) Our Brands [online], Available from: [Accessed 11th May 2011].• BP Website. (n.d.) Products and Services, [online], Available from: [Accessed 11th May 2011].• Mason, R. (2011) Gulf of Mexico oil spill: BPs Doug Suttles to retire, The Telegraph Online, 12th Jan 2011 [online] Available from: spill-BPs-Doug-Suttles-to-retire.html [Accessed 12th May 2011].• Mervin, J. (2011) Counting the cost of the BP disaster one year on, BBC News Online, 20th April 2011 [online], Available from: [Accessed 12th May 2011]
    32. 32. Operations references• BBC News (2011) US Oil Spill: ‘Bad Management’ led to BP disaster *online+ Available from: [Accessed: 11th May 2011].• BP (2010) Containing the leak [online] Available from: [Accessed: 11th May 2011].• BP (2011) Engineering and Operations [online] Available from: [Accessed: 3rd May 2011].• BP (2011) Moving to operations excellence [online] Available from: [Accessed: 11th May 2011].• BP (2011) Operations [online] Available from: [Accessed: 3rd May 2011].• Business Dictionary (n.d.) Operations [online] Available from: [Accessed: 3rd May 2011].• The Telegraph (2011) BPs Gulf of Mexico oil spill bill could hit $60bn [online] Available from: Mexico-oil-spill-bill-could-hit-60bn-Moodys-warns.html [Accessed: 10th May 2011].
    33. 33. Planning and project management references• BP (2011) Natural Resource Damage Assessment [online], Available from: 7591[Accessed: 16/05/11].• BP (2011) USA Landfill to Gas [online], Available from: 2 [Accessed: 16/05/11].• Clarke, A (2010) BP contingency plan for dealing with oil spill was riddled with errors, The Guardian, 9th June 2010 [online], Available from: plan [Accessed: 16/05/11].• Kerzner, H. (2009) Project Management: A Systems Approach to Planning, Scheduling and Controlling, 10th ed., New Jersey: Wiley• Lansons Communications (2010) BP Deepwater Horizon oil spill - One year on [online], Available from: spill-one-year-on [Accessed: 16/05/11].• McKie, R (2010) Gulf oil spill at Deepwater Horizon threatens $8bn clean-up and an ecological oil slick disaster for the US, The Guardian, 2nd May 2010 [online], Available from: [Accessed: 16/05/11].
    34. 34. HR references• BP (2011) Human Resources [online] Available from : ryId=9025266&contentId=7058308 [Accessed: 16/05/11]• The Telegraph (2011) BP ranked high for employer branding despite oil spill [online], The Telegraph, 17th March 2011, Available from : news/8163571/BP-ranked-high-for-employer- branding-despite-oil-spill.html [Accessed: 16/05/11]
    35. 35. Marketing references• BP (2011) Job Categories, [online] Available from: 023444&contentId=7058442 [Accessed: 12/05/11]• Drucker P (1954), The Practice of Management, New York: Harper & Row• UKMarketingNews (2011) Anniversary of Oil Spill Marked with Advert [online], 12th April, Available from: marks-anniversary-of-gulf-oil-spil-with-advert/ [Accessed: 12/05/11].
    36. 36. Finance references• BP leak the world’s worst accidental oil spill (2010), The Telegraph, 3rd August [online], Available from: leak-the-worlds-worst-accidental-oil-spill.html [Accessed: 10th May 2011].• BP (2011) Clean Energy: Facing the Future A ten year R&D Program, BP [online]. Available from: 2 [Accessed: 10th May 2011].• BP (2011) First Quarter 2011 Results, BP [online]. Available from: ds/B/bp_first_quarter_2011_results.pdf [Accessed: 11th May 2011].• Bryant, B. (2011) Deepwater Horizon and the Gulf Oil Spill – the key questions answered, The Guardian, 20th April [online], Available from: questions-answered [Accessed: 10th May 2011].• Pulham, S., Hilaire, E., Fenn, C. (2010) BP Oil Spill: An Interactive Timeline, The Guardian, 28th September [online], Available from: interactive [Accessed: 10th May 2011].
    37. 37. IT references• BP (2011) IT&S [online], Available from: [Accessed: 16/05/11]• GreenAir Communications (2010) Solena and Rentech to partner on synthetic fuel technology for Europes proposed first sustainable jet fuel facility [online], Available from: 1093 [Accessed: 16/05/2011].• Sylvia Pfeifer (2010) New Chief revamps BP Safety operations, The Financial Times[Online] cba6-11df-a4f5- 00144feab49a,s01=2.html#axzz1MVDtxkWf [Accessed; 15/05/11]
    38. 38. Strategic development and policy references• Deneen, S (2010) BP before the oil spill: An environmentally friendly company? [online], Available from: before-the-oil-spill-an-environmentally-friendly- company/?icid=sphere_searchsphere_news [Accessed: 16/05/11].• BP (2011) BP and Martek Biosciences Enter a Joint Development Agreement to Deliver Advanced Biodiesels [online], Available from: 2968&contentId=7055476 [Accessed: 16/05/11].