Interest Theory & Its Effect Facilitated †Myassignmenthelp.Com

Question: Discuss About the Interest Theory Its Effect Facilitated? Answer: Introduction: The oil and gas industry is worked on a project-based environment, which upsurges the whole reliability of one operating factor with another. It has been recognised that the success of the oil and gas industry differs dependent on the organisation?s ability to handle the risks prone business environments. In addition, Wiseman (2012) mentioned that the risk management strategies for the oil and gas firm like BP are focussed towards the upstream actions. It can be measured as a substantial supplier to the overall development of the oil and gas company too. The absence of a risk moderation strategy could produce millions of financial losses in the oil and gas industry. Thus, the operating economy can be affected to a momentous degree. Considering these facts, the oil and gas firm named BP has faced a huge financial loss due to its Gulf of Mexico Oil Spill issue. In the opinion of Magrini and Lins (2011), the BP?s tragedy in the Gulf of Mexico was instigated by the sequence of risk manag ement disappointments. The current study aims to evaluate the financial risk that has impacted on the total profitability of British Petroleum (BP). Points of discussion: The oil spillage issue in the Gulf of Mexico has obligatory governing actions on the BP?s operational strategy. Considering the view of Rotkin-Ellman and Solomon (2012), there is enduring ambiguity regarding the effectiveness of the residual liabilities related to the Gulf of Mexico oil spill. Although an anticipated consent decree defrayal has been made between the US and the Five Gulf Coasts along with the BP. The consensus announcement, settlement and the agreement are conditional for each other. Thus, BP has faced a greater insecurity regarding the amount of the payment of remaining cost related to the Gulf of Mexico oil spillage. It is known to all that the environmental and financial influences of the Deepwater Horizon oil spill would be very difficult to compute in both the case of space and time. As per the opinion of Boyd (2010), the oil spill issue has indirectly and directly affected the 20 categories of valued ecological services in the Gulf of Mexico. The total amounts, the company have to salary is that the US$20-billion as its liability of the oil spillage issue. In addition, for the value of lost ecosystem services, BP has paid the amount to $1.2 ? $23.5 billion (Finstein, 2010). Due to this oil spillage issue, the falling price margin of oil and gas can effortlessly produce an adverse impact on BP?s revenue margin, high profitability and cash flow statement. Therefore, BP requires to minimise the assets and re-assess the feasibility of the development scheme that might influence on the future cash flow, expenses and the turnover margin of the organisation. Contrariwise, Crowsey (2013) claimed that a unexpected improvement in the oil and gas product prices has not created much changed to recover the performance margin of BP. Since, it could probability enhance the cost inflation, economic take and arduous terms for retrieving the resources. Adding to this, the requirement for the dependable ecological accounting and reporting practices has to be accentuated to become a thoughtful about the commercial environmental performance. As per the view of Wiseman (2012), in South Africa, the drive towards the incorporated reporting for JSE-listed businesses units can offer that the opportunity of putting financial, societal and ecological information. However, that this is helpful to confirm the consistent revelation of the combined performance of organizations to the stakeholders. The government representatives reasonably have found it problematic to thoroughly amount the loss of environment goods and services. The procedural basics and outome of such educations are being frequently disputed by the stakeholders (Collier et al. 2012). As an substitute, the organisations have absorbed on a more useful direction to measuring the oil spillage damages. In the other words, by imploring renovation bids and expending those financial cos ts as a perceptible focus in the event of impairment negotiations. This could explain the BP has neither fully revealed the details of the ecology and social compensations. The fundamental calculation practises of its pre-tax charge of US$40.9 billion (Hopkin and Management, 2014). According to the analysis of the article, the BP group has also decided to pay the $360-million cost of six berms in the Louisiana fence islands project. The impact of oil spillage issue has imposed a several regulatory sense on the firm of BP. As per the article, the rules and regulations forced by the administration on the firm limit the business opportunities accordingly. In this regards, Crowsey (2013) mentioned that BP has faced the administrative risk of foreign direct investment also due to its oil spillage issue in the Gulf of Mexico. On the other hand, the foreign adjustment rules are incompetent of offering the national company in order to achieve the supreme gain and attention. Gulf Coast Claim s Facility (GCCF), final decisions in lawsuit and hearing settlements, state and local reply costs, and costs related to usual resource indemnities to gratify genuine claims (Malakoff, 2015). Thus, failing to the standard operational activity, BP has experienced, operating risk due to the unproductive misunderstandings of the capital and associated to the trading actions that could produce the monetary damage and the supervisory interference within the business portfolio of BP. However, despite of knowing and identifying the rate of damage that takes place to the natural resources, the politicians of the region is remained silent (Tily, 2014). This is because, the export of oil and other products from BP would result in attainment of huge amount of revenue and net income. This would prove extremely beneficial for the development of the economical as well as personal affairs. In regard to the latter statement, Wiseman (2012) denoted that the intention of the politician is always changing just as the taste and preferences of the target customers of this age. Their desires and requirements would never become satisfied and so, they try to concentrate over their requirements mainly rather than others. Apart from this, the presented article clearly depicts that deepwater horizon oil spill would result in a very harmful and stringent regulation over the economy of US and others as well. As a result, the environment would get damaged that may present negative effec t over the ecology. Thus, the health and wellbeing of the individual and bird and animal life would get disturbed entirely. In regard to this statement, Hopkin and Management (2014) denoted that proper measures need to be introduced by the politicians of the nation thereby reducing the level of risk over the environment. Since, it is the prime and most effective duty and responsibility of the politicians of the country to maintain a good and risk free lively-hood. Contrary to this point, Wiseman (2012) argued that interest of the society need to be the prime area of concern of the politicians of this age as mentioned by interest theory. According to the Malakoff (2015) regulation need to be introduced over the demand and supply of the products and services of the economy in order to make it risk free. The key requirement of the theory is to implement corrective measures against the inequitable market practices. Doing so, might prove effective in improving the respect and renownednes s of the politician within the eyes of the common public. Thus, the intention of the politicians as regulators is to make optimum utilisation of the resources of the environment thereby diminishing its side effects. Only then, it would be fruitful for the society as well as its individual to attain fullest benefits of the resources of the organizations (Lutz, 2014). In regard to this, the politicians of the region tried to impose use range of pre-tax charge over the functions of BP in the recent years. At the same time, its operations are also restricted in order to safeguard the environment from varied types of detrimental issues like deepwater horizon offshore oil platform in fire, oiled brown pelican are becoming extinct etc (Keynes, 2015). However, in order to protect such types of negative effects over the environment, the politicians act as regulators thereby limiting the proper functioning of BP. Although, the products of BP are of huge demand among the publics of the current situation still it is restricted in favour of the protect the nature and the ecology. Against the latter statement, Finstein (2010) depicted that improper implementation of policies or strategies by the regulators or the politicians might prove detrimental for the economy in this age of extreme competitiveness. This means that, as per the environmental impact assessment, eco-friendly practices need to be introduced. The politicians or the regulators of the state and government are recommending varied types of advanced recyclable services in order to safeguard the environment from any sort of natural damages (Daniel and Vaaler, 2015). Only then, it would be effective and sustainable for both the firm of BP and the politicians of the region. Conclusion: The Deepwater Horizon oil spill is expected to result in more rigorous directive of oil and gas activities in the U.S. and elsewhere, it is also relating to the ecological, well-being and security protection controls. The oversight of boring operations, as well as in terms of access to new drilling areas. The amount and timing of the costs and the liabilities involving to the oil spillage incident has also changed the regulatory and operating environment of the oil and gas firm. These risks are projected to have an extensive adverse impact on the organisational business, competitive position, cash flows, predictions, liquidness, stockholder returns and the implementation of its strategic agenda. References: Boyd, J. (2010) Lost ecosystem goods and services as a measure of marine oil pollution damages?. Resources for the Future, 10(3), pp. 14-25. Bozeman, B. (2014). Public Values and Public Interest: Counterbalancing Economic. Usa: Oxford Collier, P.M., Agyei-Ampomah, S. and Agyei-Am.., S. (2012) Management accounting risk and control strategy: Paper P3. 5th edn. United Kingdom: CIMA Publishing. Crowsey, R.C. (2013) ?Persistence of gulf of Mexico surface oil from the 2010 Deepwater horizon spill?, Southeastern Geographer, 53(4), pp. 359?361. Daniel, J. and Vaaler, L. (2015). Mathematical Interest Theory. Usa: Sage Learning Finstein, M.S. (2010) ?Gulf of Mexico oil spill debris processing?, Microbe Magazine, 5(7), pp. 279?282. Hopkin, P. and Management, I. (2014) Fundamentals of risk management: Understanding, evaluating and implementing effective risk management. United Kingdom: Kogan Page. Keynes, J. M. (2015). General Theory Of Employment , Interest And Money. Usa: Oxford Lutz, A. F. (2014). The Theory of Interest. Usa: Sage Learning Magrini, A. and Lins, L. dos S. (2011) ?Integration between environmental management and strategic planning in the oil and gas sector?, Energy Policy, 35(10), pp. 4869?4878. Malakoff, D. (2015) ?After geoscientists joust, judge rules BP gulf spill totaled 3.19 million barrels of oil?, Science, 2(1), pp. 122?125. Rotkin-Ellman, M. and Solomon, G. (2012) ?FDA risk assessment of seafood contamination after the BP oil spill: Rotkin-Ellman and Solomon respond?, Environmental Health Perspectives, 120(2), pp. a55?a56. Tily, G. (2014). The Theory of Interest. Usa: Sage Learning Wiseman, H. (2012) ?State regulation: Regulatory risks in tight oil and gas development?, Natural Gas Electricity, 29(5), pp. 6?13.