Overview of the Deepwater Horizon Oil Spill
The largest oil spill to have ever occurred in United States is the Deepwater Horizon Oil Spill and is also known by the name Gulf of Mexico oil spill. It took place as a result of the explosion in the oil platform of Deepwater Horizon located nearly fifty miles to the southeast of the Mississippi River Delta. The incident occurred in 2010. The British petroleum on 15th July gave the statement that the well was capped for stopping the flow of oil in the Mexican Gulf (Appannaiah, Reddy and Putty, 2010). The sudden surge in the release of oil was the subject of fierce debate, with 5 million barrels of oil being released from the Macondo well. Nearly 4.2 barrels of oil were emptied into the water of the Mexican Gulf. The oil slick surface differs in size according to the estimate. The footprint has been estimated to nearly 68000 square miles. The main project developer for the project of Macondo where the incident took place was the British petroleum. The Deepwater Horizon was bought by The Transocean Limited and was a part of the contract lying with BP for drilling an exploratory well. When the explosion occurred, Transocean and BP were still in the procedure of closing the well belonging to the production completed later(Benoit, 2011). The cementing process of the casings present in the well was completed by Halliburton. The BP was the side which was responsible for the incident under discussion and apparently carried the responsibility of cleaning up the costs resulting from the spill of oil. The Bp thus ensured that it took the cost of cleaning up the spill and had also indicated that both Transocean as well as Hallyburton deserved to be blamed for the oil spill. This is in a nutshell, whatever that happened in the incident which claimed so many lives and is regarded as the biggest oils spills of all times. The cementing of the caising was completed at that time. The part which was mainly responsible for the incident was BP and the responsibility of providing the costs for clean-up rested with it. Hence the clean-up costs were ensured the costs for clean-up and mentioned that both Halliburton as well as Transocean deserve to be blamed for the spill (Britton and Waterston, 2013).
The income statement of the company was prepared and put forward by the BP in 2011. The statement belonged to the fourth quarter of 2010. The charges before taxation amounted to UD $ 40.9 billion and were included in the statement of income which was a part of the financial report. The charges were related to the spilled oil in the Deep Water Horizon. The cost also includes within it, US $ 17.7 billion that applied effectively to the year 2010. The charges which were related with the man-made disaster have been taken into consideration as the non-operative cost which would be deducted from among the income tax (Horngren, 2013). The income includes within it, the escrow cost of US $ 20 billion. It was also agreed by the BP that in the coming 3.5 years, the organization would establish it through the process of selling the assets present in United States (Godfrey, 2010). The legal requirements can be solved by the organization by means of using the escrow amount ascertained by the facility of the Golf Coast Claims. It includes the costs that are concerned with the destruction of the naturally found resources, the settlement issues of the ultimate judgments and the costs and litigations of the cost state and local responses. The United States government had the motive of raising funds and hence lent $500 million to examine the effect that the oil spill had on everything. It also wanted to estimate the exact costs involved in the response of the offshore and marine ecosystem. Investments of about $ 360 million were also made by the BP for the purpose of using them in the project assigned for the Island of Louisiana Barrier (Kew and Watson, 2012).
Causes of the Deepwater Horizon Oil Spill
The charges involved in the case that concerned with the fines and also the penalties were not revealed. The amounts that arose from the liabilities that the company had according to the Clean water act were also not taken into consideration. According to the government of the United States, calculating such huge amounts within the due time was not so easy. The entire sum of money that the organization would require to pay is about US $20 billion (Libby, Libby and Short, 2014). This amount of money cannot be symbolized or represented as the liability cap. According to the BP, in 2010, the exposure which is regarded as final would be reliant on a number of factors. These include the amounts of oil that are permanently halted, the number of claims and the nature of those claims, and the time taken for the activities concerning the clean-up. There was a significant impact that the incident imposed on the resources present in the country and the livelihood of the areas that were affected. The natural resources and also the ecosystem of the deep Water Horizon were affected.
The main responsibilities that a government or a regulator has on its shoulders, is the management and the regulation which aids in directing the all-around behavior of the individuals and the institutions. This is done in accordance with the rules and the regulations which are set by the organization. The setting of internal standards and the basic key activities and evaluations involved in the groups and business institutions contain self-policies or self-imposed regulations. Many private entities that are established by and have the support of the key industries manage and control such types of oversight (Powers and Needles, 2012). This helps in ensuring safe operation by the individuals who are the key operators and in the process help the leaders in the industry. This aids in identifying and determining that there was a misstep owing to the members. This is also regarded as having a vital repercussion. However the research in consideration suggests that in the industries which have a critical and powerful self-policing, the regulators also requires the active presence in all the occasions. This will hence help in providing key oversight along with several regulatory controls that are vital. This will ultimately help in the measurement along with the main responsibilities that cannot be relinquished whenever the matter amounts to ensuring public safety and also health measures.
Consequences of the Deepwater Horizon Oil Spill
The platform where there is the management of the ethics and several other codes of conduct is regarded as the industrial rules and the regulations. The firms which engage in standard setting for industries and in self-policing are found in large numbers in the United States and in other developed countries also. This applies specially to the operation marked by technical and critical conditions which are chemical, civil aviation, nuclear power and other firms for oil and gasses where regulators largely exercise their oversight. Such methods are found in the form of forces which are cohesive in nature and coexist wherever there is a consideration of a practical matter. The practical matter is found in a relatively less number of individuals who have the required skills and the diversity in experience (Schroeder, Clark and Cathey, 2011). This ultimately makes the dependence of the regulators on their own personnel difficult. The support provided for the setting of key standards and for self-policing makes possible a significant rise in the industries where reputation depends on the firm’s overall performance. Although, research suggests that the naval force is also a part of the policy that is considered. The government firm SUBSAFE is also regarded as the key example of self-policing which would help in confirming the overall measures of safety and health of the nuclear submarines belonging to it.
The delegated regulatory risk examination of world investment Bank Corporation to the key financial institutions which are considered to be consolidating supervised the entities planning and program in the year 2004. The strict self-policing is not measured as the replacement for the control device but also helps to supply vital services which are estimated as critical and significant to the regulator’s misunderstanding (Scott, 2015). The mostly cost of forgetting that is essential premise is measured to be disastrous. The explanation program was the border and designed to construct up a regulatory breach which is led and left by Congress within transform in the global investments which is also measured to be voluntary.
The spill had not directly and in a straight line affected at least twenty grouping of the ecosystem services around the Gulf of Mexico which comprise climate guideline, Hurricane defense by the coastal wetlands, visual values and recreational. It is tough to estimate the oil spilling imposed in a significant impact on the economic and ecological environment. Agencies have shown a different sort of practical approaches that evaluate the damages. The biophysical costs in this situation are obvious and predictable. The companies should have managed all the operations that lead to the destruction of the ecosystem (Waterston, 2006). Resource replacement price approach demonstrated to accomplish the objective to transfer the lost economic and ecological prosperity through the restoration process. The financial issues that costs are not the comparative like advantages or the benefits. The physically damaged is entirely underestimated the showing challenges that are giving casual and firmly identified with the impacts. The system that is to quantify the administrations of the environment achieve more develop offended parties, courts, stage and trustees require to likely a useful, powerful tool in their hands for the legal obligations of the marine damages. The reflection on the restoration values is an estimation of the influencing areas, or the costs need to lead both under prevention. To elaborate the current scientific and the economic knowledge, the punishments scale is usually having to determine as the political arrangements that their specialized estimations. There have such data to require the extreme investigations globally and furthermore to comprehend the sufficiency of the rebuilding in their biological community values and the benefits that had lost partially (Weil, 2017). This sort of clarification that it is BP has neither demonstrated the details of the social damages of the environment that it is nor to underlie the classifications of systems of pre-tax that charges such as US$40.9 billion. In this unique situation, the accounting advantages to deduct the assessable income from the impressive non-accounting charge. The Association of British Petroleum Limited has to demonstrate the partners with the full images of the social, finance related and the natural implications of this situation.
The British Petroleum Limited organizations showed the many differences that occurred and affected the individual area. The oil spilling in the Deep Water Horizons indicates that more rules and regulations are required for the oil and gas activities in the United States. The environmental impact assessment used to manufacture the biodiversity services and ecosystems services measures. The table of the environmental revenues should be summarized the calculations methods by environmental transactions, liabilities or the charges and explanations of the several gaps between the estimated and latter externalities. The risks show the results of the decrease in the financial performance of the company (Scott, 2015). The social and ecological externalities of reporting of the organizations and impacts on the ecosystem service are being included.
Conclusion
There should be the implementation of the rules and regulations by the government for dealing with the situation and so that it is not repeated ever again. The ecosystem was affected hugely by the incident which resulted in a major loss. The oil spill in the deep water horizon is also known as the Mexican Gulf oil spill and is the biggest oil spill to have ever taken place in the world. The financial subdivision of the organization of BP is responsible for the oil spills in the deep water horizon (Libby, Libby and Short, 2014). The financial as well as the socio-economic destructions are shown and added to that there is the ecological reporting as well as accounting.
References
Appannaiah, H., Reddy, P. and Putty, R. (2010). Financial accounting. Mumbai [India]: Himalaya Pub. House.
Britton, A. and Waterston, C. (2013). Financial accounting. Harlow: Financial Times Prentice Hall.
Horngren, C. (2013). Financial accounting. Frenchs Forest, N.S.W.: Pearson Australia Group.
Kew, J. and Watson, A. (2012). Financial accounting. Cape Town: Oxford University Press.
Libby, R., Libby, P. and Short, D. (2014). Financial accounting. Maidenhead: McGraw-Hill Education.
Powers, M. and Needles, B. (2012). Financial accounting. [Mason]: South-Western, Cengage Learning.
Schroeder, R., Clark, M. and Cathey, J. (2011). Financial accounting theory and analysis. Hoboken, NJ: Wiley.
Scott, W. (2015). Financial accounting theory. Toronto: Pearson.
Waterston, C. (2006). Financial Accounting. Pearson Education UK.
Weil, R. (2017). Financial accounting. [Place of publication not identified]: Cengage Learning.
Benoit, P. (2011). The BP oil spill. New York: Children’s Press.
Godfrey, J. (2010). Accounting theory. [Sydney u.a.]: Wiley.
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