BP is fast becoming a global by word and abbreviation for “Bad Publicity”!!

June 13, 2010

The BP oil spillage disaster is damaging on four levels. In order of priority, it is an environmental disaster, a financial disaster, a political disaster and a public relations disaster. BP now stands for “Bloody Pathetic”, “Battered Pensions”, “Battle Politics” and “Bad Publicity”!!

A recent survey has speculated that at least 40,000 barrels (1.7 million gallons) of oil a day may have been gushing out from a blown-out Gulf of Mexico well, before the oil giant successfully placed a cap on the well on 3 June. Oil has been leaking into the Gulf since the Deepwater Horizon rig exploded on 20 April and sank off the coast of the US state of Louisiana, killing 11 workers.First and foremost this is an unprecedented environmental disaster, the like of which the world has never witnessed before. The cost to wildlife and human communities in the vicinity of the Gulf is horrific and inestimable at this time!!

The financial ramifications for BP, it’s shareholders and millions of UK Pension Funds is equally damaging and detrimental. The firm’s share price has collapsed more than 40% since the Deepwater Horizon rig sank on 22 April. The company is responsible for almost one in every seven pounds of dividends paid to British pension funds. BP is under pressure to convince US politicians that it will have enough cash to pay for the clean-up operation and compensation for those affected after the US government said it “not pay a dime” for cleaning up and that BP would be held responsible for all damages. The US Speaker of the House of Representatives, Nancy Pelosi,has accused BP of a “lack of integrity” over its approach to the spill. An advertising campaign for BP apologising for the oil spill polluting the Gulf of Mexico was also heavily criticised by President Obama. The oil giant has admitted the spillage crisis is costing it millions and says the project will cost about $360m (£244m). According to Louisiana Governor Bobby Jindal, the White House had ordered BP to pay for the construction of sand barriers. BP estimates that the disaster has so far cost the company approximately $990m (£674m) in clean-up costs, but has refused to speculate on future expenses. This is a massive increase from May when the cost was $350m (£235m).

I would dispute that BP have displayed a lack of integrity. However they have exhibited a lack of foresight and planning in the event of a disaster. Where were the contingency plans? Any business has a plan of some description in the event of an unforeseen disaster hitting a company: even if it is as basic as a fire drill, not to be confused with a fire on a drill platform!! On this basis, Barack Obama’s frustrations are perfectly justified. However he is not justified in “Brit Bashing” on the basis that this is a British plague on the USA!! BP is as much an American corporation as it is a British one. Half the board directors are Americans and two thirds of the employees are from the USA. The management company responsible for operating and maintaining the offending oil rig are American. Barack Obama should stop using this disaster as a “political football”, and remember that as oil is being shed in The Gulf of Mexico, British blood is being shed alongside American blood in Afghanistan. This is a time for solidarity between our two nations!!

However there will come a day, when the environmental mess is overcome, BP’s profits and shares return to former highs and the political hangover wears off. However what will be much more difficult to address and rectify, will be the Public Relations impact on the BP  brand. It takes years to build a brand reputation, seemingly only a few weeks to undermine it. The Corporate Affairs department will be working overtime for many years to come to re-build good will and PR kudos for this maligned brand. What they will need to implement is a long term, on going PR programme that sees the company spearheading good work on global environmental issues. BP need to launch a multi million pound Environmental Foundation that will benefit worldwide environmental work, but not just in the locales the company works in. Only then, will BP start to make amends for this appalling environmental disaster.

One response to “BP is fast becoming a global by word and abbreviation for “Bad Publicity”!!”

  1. Ed Burghard says:

    BP damaged more than its own brand. It also damaged the image of the communities involved and made it harder for them to compete for capital investment. Read about the work being done to help economic development professionals refurbish their community brands.