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Wednesday, June 16, 2010

BP Agrees to Create Fund to Pay for Spill -

BP Agrees to Create Fund to Pay for Spill -

WASHINGTON — The White House and BP agreed on Wednesday that the oil giant would create an independent $20 billion fund to pay claims arising from the worst oil spill in American history.
Bowing to pressure from the Obama administration, the company also said it would suspend paying dividends to its shareholders for the rest of the year and would compensate oil field workers for lost wages.
The $20 billion compensation fund will be run by Kenneth Feinberg, the mediator who oversaw the 9/11 victims compensation fund. President Obama announced the agreement to reporters at the White House Wednesday afternoon, after he and his top advisers met in the morning with BP’s top executives and lawyers to finalize the agreement. After the president’s remarks, the chairman of BP, Carl-Henric Svanberg, announced the dividend suspension. Mr. Svanberg apologized “to the American people” for the disaster and said that BP would “look after the people affected, and we will repair the damage to this region and the economy.”
Separately from the $20 billion fund, BP agreed to set aside $100 million to compensate oil field workers who have been idled by the moratorium on deepwater drilling, which the administration imposed after the explosion and fire April 20 that destroyed a BP drilling rig in the Gulf of Mexico and led to the spill. The company initially resisted compensating those workers because the moratorium was not its decision. More...

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