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BP agrees to $20B fund for spill victims

June 16, 2010 12:00:00 AM PDT
BP will set aside $20 billion to pay the victims of the massive oil spill in the Gulf, senior administration officials announced Wednesday. President Barack Obama met on his own turf with top BP officials on Wednesday to press his demands that the London-based oil giant pay into a claims fund for victims of the worst oil spill in the nation's history.

The meeting comes the morning after Obama vowed to an angry nation that "we will make BP pay for the damage their company has caused." BP is the majority owner of the deep water well that blew out on April 20, killing 11 rig workers and triggering the spill.

The independent fund will be led by lawyer Kenneth Feinberg, who oversaw payments to families of victims of the Sept. 11, 2001, terrorist attacks. In his current role, Feinberg is known as Obama's "pay czar," setting salary limits for companies getting the most aid from a $700 billion government bailout fund.

The $20 billion is not a cap - if legitimate claims outstrip that amount, then BP will required to pay more.

Several big questions remain unanswered, including when BP would start processing claims and paying people out of the fund; who and what would exactly be covered under the plan; how the White House and BP came up with a figure of $20 billion; and whether other involved companies will be required to chip in.

Latest Developments:

  • BP began burning oil siphoned from a ruptured well in the Gulf of Mexico early Wednesday as part of its plans to more than triple the amount of crude it can stop from reaching the sea.
  • Oil and gas siphoned from the well first reached a semi-submersible drilling rig on the ocean surface at approximately 1 a.m., according to BP.
  • The system uses lines to suck oil from a stack of pipes near the seafloor to a drilling rig on the ocean surface. Once the oil is aboard, it's shot down a specialized boom, mixed with compressed air and ignited. It's the first time this particular burner has been deployed in the Gulf.
  • The oil giant previously said they believed the burner system could incinerate anywhere from 210,000 gallons of oil to 420,000 gallons of oil daily once it's fully operational.

The Associated Press contributed to this report.


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