BP will contribute $20 billion to Gulf recovery escrow fund

06/16/10 Seán Kinane
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President Barack Obama met today with officials from BP and announced that the company would put aside $20 billion to pay economic damages associated with the Gulf oil disaster.

“Currently, under federal law, there is a $75 million cap on how much oil companies could under certain circumstances be required to pay for economic damages resulting from spills such as this. That amount would clearly be insufficient. That is why I am pleased to announce that BP has agreed to set aside $20 billion to pay claims for damages resulting from this spill. This $20 billion amount will provide substantial assurance that the claims people and businesses have will be honored. And it is not a cap.”

According to the White House, the $20 billion would be deposited in to an independent escrow account over four years, beginning with only $5 billion this year.

“This $20 billion will not be controlled by either BP or by the government. It will be put in an escrow account, administered by an impartial, independent third party.”

BP has previously committed $500 million over ten years for Gulf of Mexico research. Obama said today BP announced funds for oil rig workers who are out of work.

“Additionally, BP voluntarily agreed to establish a $100 million fund to compensate unemployed oil rig workers affected by the closure of other deep water rigs. We have mutually agreed that Ken Feinberg will run the independent claims process we are putting in place, and there will be a three-person panel to adjudicate claims that are turned down. Every effort will be made to expedite claims. Ken has long experience in such matters, including running the fund that compensated victims of 9/11. And I am confident he will ensure that claims are administered as quickly, fairly, and transparently as possible.”

Also today, the chair of BP's board said the company will suspend its quarterly dividend.

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