BP’s New Safety and Operational Risk division

On a press release dated September 29th, Dudley, the new CEO of BP, announced that he is creating a whole new division entitled “Safety and Risk Unit” that will have “Sweeping powers to oversee and audit” as well as “intervene in all aspects of BP’s technical activities”.

In the words of Dudley:

“The Macondo incident was a tragedy that claimed the lives of 11 people, caused injury to many others and had a widespread environmental impact.

Our response to the incident needs to go beyond deepwater drilling. There are lessons for us relating to the way we operate, the way we organize our company and the way we manage risk. As I take up my new role I am aware of two things. First, there is a pressing need to rebuild trust in BP around the world. Second, BP’s people have both the commitment and the capability to rebuild that trust.”

This press releases raises more questions than it answers, of course.

What is the extent of the power that this unit will have? How will this change the way that BP does business, especially when the share holders are anxious to see prices go back up?

BP really couldn’t do anything else. With billions of dollars at stake and confidence in BP at an all time low, it needed to do something “drastic” to show that they were serious about changing the way they have been doing things for so long. The world was watching and the world wanted to know what BP was going to do to make sure that the type of accident that recently claimed 11 lives and negatively impacted the environment for years to come would not be repeated.

The question of whether this unit will do more than write reports and try to look like they are making changes is yet to be determined. Unfortunately when it comes down to a battle between caution and dollars, especially when most of the changes that are called for will be called “overeacting”, the record hasn’t been good.

What do you think??

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