Friday, April 30, 2010

Oil and BP's Reputation Both Spilling

The New York Times and the Houston Chronicle both write today about the fallout regarding BP's reputation and the spill in the Gulf of Mexico.

BP says that the offshore drilling accident that is spewing thousands of barrels of oil a day into the Gulf of Mexico could cost the company several hundred million dollars.

Nobody really knows whether the London-based oil giant is being too conservative about the cost for the April 20 accident, which some experts say could end up as the biggest oil spill in history. The 1989 grounding of the Exxon Valdez off Alaska, for example, cost Exxon Mobil more than $4.3 billion, including compensatory payments, cleanup costs, settlements and fines.

But regardless of the out-of-pocket costs, the long-term damage to BP’s reputation — and possibly, its future prospects for drilling in the Gulf of Mexico — is likely to be far higher, according to industry analysts.

The magnitude of the Deepwater Horizon disaster seems to be finally sinking in with investors. BP’s stock plunged more than 8 percent Thursday in American trading in an otherwise strong day for stocks. Since the accident, the American depositary receipts of the company have fallen about 13 percent, closing Thursday at $52.56.

The Houston Chronicle reported this morning that 19 members of Congress are now investigating BP, asking if corners were cut in the construction of the Atlantis offshore production rig. Atlantis is described by BP as the deepest oil production platform in the world.

Getting ahead of a giant crisis such as this offers a few very important lessons for crisis communicators.
  1. Get in front of the crisis as quickly as possible, in the form of a dedicated journalists-only website and daily press briefings. Post detailed, comprehensive information there descriptive of the company's strides toward environmentally sound engineering and safety protocols.
  2. Tell the media exactly what you are doing to remediate the problem.
  3. Don't let others break news before you, establish yourself as the go-to source for breaking news so you appear open, honest and forthcoming.
More next week....

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