Subject category:
Ethics and Social Responsibility
Published by:
IBS Research Center
Length: 11 pages
Data source: Published sources
Share a link:
https://casecent.re/p/71988
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Abstract
Since March 2006, British Petroleum''s (BP) pipeline in the Alaska Tundra Region, which connected Prudhoe Bay (the biggest oilfield of US) and the Trans-Alaskan pipeline was virtually collapsed. A surveillance team jointly operated by BP and government officials revealed that the six mile long pipeline connecting the oilfield and the Trans-Alaskan pipeline was severely corroded. This led to the decision to close down the oilfield. This incident reduced oil transportation through the pipeline to one quarter, affected BP''s top-line and bottom-line and led to a severe public relations disaster for the company. Analysts often wondered how a company like BP, which made ''green'' a core part of its identity and re-branded itself as ''Beyond Petroleum'' suffered from the worst oil spill. It was later revealed that to put more and more emphasis on cost competitiveness, the company failed to take proper preventive measures to check the corrosion of the oil field. Analysts opined that though the company still believed its ''green'' ethos and values, it needs to be aligned with the business philosophy that the company practiced in the field. This case gives details about: (1) the Prudhoe Bay incident; (2) its impact on BP''s ''green'' positioning and environment friendly image; (3) the strategy taken by BP to win back its ''green'' image; and (4) how the company planned to prevent similar incidents in the future without affecting its cost competitiveness.
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Abstract
Since March 2006, British Petroleum''s (BP) pipeline in the Alaska Tundra Region, which connected Prudhoe Bay (the biggest oilfield of US) and the Trans-Alaskan pipeline was virtually collapsed. A surveillance team jointly operated by BP and government officials revealed that the six mile long pipeline connecting the oilfield and the Trans-Alaskan pipeline was severely corroded. This led to the decision to close down the oilfield. This incident reduced oil transportation through the pipeline to one quarter, affected BP''s top-line and bottom-line and led to a severe public relations disaster for the company. Analysts often wondered how a company like BP, which made ''green'' a core part of its identity and re-branded itself as ''Beyond Petroleum'' suffered from the worst oil spill. It was later revealed that to put more and more emphasis on cost competitiveness, the company failed to take proper preventive measures to check the corrosion of the oil field. Analysts opined that though the company still believed its ''green'' ethos and values, it needs to be aligned with the business philosophy that the company practiced in the field. This case gives details about: (1) the Prudhoe Bay incident; (2) its impact on BP''s ''green'' positioning and environment friendly image; (3) the strategy taken by BP to win back its ''green'' image; and (4) how the company planned to prevent similar incidents in the future without affecting its cost competitiveness.