That Gulf Oil Spill

The real questions on the Gulf oil spill.

Did BP ‘cut corners’ on safety in the Gulf of Mexico? 

Yes, of course. It is a stupid and emotive way of asking a ridiculous question, but the suggestion that BP did not, is also absurd. The process of deciding how to approach complicated decisions like this is called a cost benefit analysis. All companies do it. So do all individuals. To those who think the value of human life is infinite, how often do you check the brakes on your car? You could be slightly safer – to yourself and others – by checking them more often. And you are in an infinite regression. You could book your car in for a full check up every day. Obviously, that would cost a fortune. Obviously, the incremental safety from doing so is tiny. In other words the cost of that incremental safety is not worth it.

If the value of the environment is infinite, you should not be driving at all. Try walking everywhere. Of course, a company can get its cost benefit analysis wrong. It might underestimate the risks. With hindsight, it is obvious that BP did so. It may even have been possible to see that in advance.

Was Tony Hayward right to say ‘I don’t know’ so often in his testimony to Congress? 

No. It is a silly way of saying what he meant. The standard response to such questions in a crisis, when you genuinely don’t have the information, is “We are investigating that, and we will report back as soon as we have all the facts”. You need to communicate not just that you don’t have the information but that you are actively looking into it and that you are committed to transparency.

Is BP getting a rough ride from the American media and politicians because it is British

Maybe, a bit. Certainly Barack Obama used the name “British Petroleum” which the company dropped 12 years ago. But the American media is hardly being soft on Anadarko, the American minority partner or Halliburton which was responsible for the production casing. The fact is that BP is in charge of managing the operation on behalf of itself and its partners and it is the majority (65%) partner. BP was responsible for the management decisions. Forty percent of BP’s shares are actually quoted on the New York Stock Exchange and many of those floated in London are actually owned by international, including American, mutual funds. British media would be much harder on calling Exxon-Mobil an American company if the situation were reversed, and in other countries the anti-Americanism would be even stronger.

Is the BP name now a liability? 

Quite possibly. A company’s valuation includes the value of its assets plus ‘goodwill’. BP’s valuation has fallen by 50%, though most of its assets (the Deepwater Horizon rig aside) are worth exactly what they were a few weeks ago. The decline was entirely in the value of its reputation. BP merged with Amoco and ARCO in the 1990s. The initial plan was to brand as Amoco (originally American Oil Company) in the US and BP elsewhere. Perhaps it is time to revive the Amoco name and rebrand all the gas stations in theUS, and perhaps internationally, under this name.

Article provided by Quentin Langley
Lecturer in PR and Political Communications,
School of Journalism, Cardiff University

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