RepRisk case study
The Deepwater Horizon oil spill – the largest environmental disaster in US history
On April 20, 2010, the Deepwater Horizon oil rig, operated by British Petroleum Plc (BP) in the Gulf of Mexico, exploded and killed 11 workers. Around 3.2 million barrels of oil spilled into the ocean – polluting water, destroying beaches, and killing wildlife. The Deepwater Horizon explosion became the worst environmental disaster in US history. Related costs for BP had amounted to over USD 60 billion by mid-2016. This amount far exceeds the costs of the 1989 Exxon-Valdez spill, which had been considered one of the worst environmental disasters in US history, and had cost Exxon around USD 4.3 billion.
Consequences for BP
This environmental catastrophe turned out to have extensive consequences for BP’s business and shareholders. Within months of the disaster, BP’s stock had plummeted nearly 50 percent, and six years after the disaster, the share price has not substantially recovered. Record costs for BP accumulated to an estimated USD 24 billion in spill-related expenses and an additional USD 20.8 billion fine for the 2015 settlement with the US Department of Justice. In the major lawsuits that followed, BP was found guilty of gross negligence.