Cultural Issues Engulf BP When an explosion occurred on British Petroleum’s (BP) Deepwater Horizon oil rig on April 20, 2010, in the Gulf of Mexico, 11 people died, many others were injured, and oil began to gush from the wellhead on the sea floor that continued to pour out for the next three months. Occurring 41 miles off the U.S. Louisiana coast, it was the largest 64 accidental oil spill recorded ever, with an estimated release of 4.9 million barrels of oil. The cleanup was massive and well organized, yet the spill contaminated 68,000 square miles of ocean, an area about twice the size of Hungary or South Korea. By early June, oil had lapped 125 miles of coastline and barrier islands in Louisiana, Florida, Mississippi, and Alabama. A year later, 1,074 miles of coastline had been contaminated. BP encountered many problems in addition to the enormous environmental degradation the spill caused in a fragile area. Yet the company made things far worse for itself, and for others, The Deepwater Horizon oil spill seen by NASA’s Terra satellite on May 24, 2010 through cultural misunderstandings about people in the United States and how they respond to crises. First, BP’s top U.S. executives were British, although the United States “accounts for about a quarter of BP’s production, almost a third of its reserves and more than half its refining capacity and retail outlets.” Tony Hayward, chief executive at the time, was also British, as were the heads of media and BP’s two main operating businesses in the United States. The most senior U.S. staff member, managing director for the Americas and Asia, had held a series of overseas appointments at BP and did not have deep local ties. To the angry public, BP was easily seen as a solidly British company with little connection to the United States. Even its PR firm was British. Then there were mistakes in defusing anger over the spill. Hayward apparently did not recognize the seriousness of the crisis, nor the intense level of public emotion he faced. On May 14, he told the U.S. public, “the Gulf of Mexico is a very big ocean. The amount of volume of oil and dispersant we are putting into it is tiny in relation to the total water volume.” Four days later, he said, “I think the environmental impact of this disaster is likely to be very, very modest.” On May 30: “There is no one who wants this thing over more than I do. You know, I’d like my life back.” And on June 4, “I’m so far unscathed. . . . They’ve thrown some words at me. But I’m a Brit, so sticks and stones can break my bones but words never hurt me, or whatever the expression is.” Hayward’s matter-of-fact response greatly disappointed and then angered a public that needed and expected emotion, apology, and sympathy. His British accent only heightened the contrast between what the public wanted and what it received. People thought BP was not taking the disaster seriously. Yet, for many British, such a public show of emotion would be deeply unsettling. Bob Dudley, the U.S. managing director for the Americas and Asia, expressed his emotions: “I just feel sad. I’ve been working in the oil and gas business my whole career. It provides a product that people need, it’s energy, and all of us can’t believe this has happened.” But Dudley was not in charge; Hayward was. Questions 1. Do you think the U.S. public’s response to the disaster would have been different had the company been more localized, for example, with a U.S. PR firm and U.S. executives? IB IN PRACTICE
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