February 12, 2007 |

Monday Accident and Lessons Learned: BP News from Reuters/CNN – BP Cuts ’07 Forecast

These are the kind of quotes you don’t like to see about your company:

“But the company’s pessimistic outlook comes as BP struggles to regain investor confidence after a series of safety, environmental and legal problems in the U.S. and weeks after Chief Executive John Browne sought to address uncertainty over the firm’s leadership by announcing he would step down 17 months early.”

“The rise in BP’s capex also reflects higher spending on safety at U.S. refineries where fatal accidents occurred, after internal and government investigations identified safety failings.”

They are from a Reuters/CNN story.

They are one of the “costs” of an accident that aren’t considered in most accident cost calculations.

How much BP has spent on advertising to improve its image? I remember a series of “environmental” adds by BP. And how much will they have to spend to recover their image after negative press like that quoted above?

The lesson learned here is fairly obvious. And ounce of prevention can sometimes be worth way more than a pound of cure. Or as another old saying goes … Penny wise, Pound foolish.

The money saved skimping of safety initiative at BP’s refineries and on pipeline maintenance on the North Slope were the pennies saved. The fines, losses of production, and PR black eye costs are the Pounds that will be paid after these accidents.

Whenever someone has an idea that cutting safety spending is an effective tool for increasing short term earnings, remember this example.

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