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BP Agrees to Start $20 Billion Fund for Gulf Disaster Victims

June 16, 2010 at 12:00 AM EST
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JUDY WOODRUFF: Billions of dollars will start flowing from BP to victims of the Gulf oil spill.

President Obama made the announcement today, after assuring the nation last night that the government will make BP pay.

U.S. PRESIDENT BARACK OBAMA: I’m pleased to announce that BP has agreed to set aside $20 billion to pay claims for damages resulting from this spill.

JUDY WOODRUFF: That word came hours after BP’s top executives arrived at the White House. They met for the first time with the president and at length with his top lawyer and others.

Mr. Obama said he got what he asked for.

BARACK OBAMA: This $20 billion will provide substantial assurance that the claims people and businesses have will be honored.

It’s also important to emphasize this is not a cap. The people of the Gulf have my commitment that BP will meet its obligations to them.

JUDY WOODRUFF: Kenneth Feinberg will oversee the payments. He ran the 9/11 victims compensation fund and is currently the government’s pay czar, setting salary limits for bailed-out companies. In addition, BP will contribute $100 million to help oil industry workers who have been idled by the federal moratorium on deep-sea drilling.

After today’s talks, the BP chairman, Carl-Henric Svanberg, also announced that the oil giant will suspend dividend payments to its shareholders for the rest of the year to ensure it meets commitments to the Gulf Coast.

CARL-HENRIC SVANBERG, chairman, BP: I would like to take this opportunity to apologize to the American people on behalf of all the employees in BP, many of whom are living on the Gulf Coast.

I hear comments sometimes that large oil companies are — are greedy companies or don’t care. But that is not the case in BP. We care about the small people.

JUDY WOODRUFF: Since the spill began 58 days ago, BP’s stock has been hammered down to half its previous value. And, in recent days, talk of a claims fund raised new concerns in Britain.

Prime Minister David Cameron warned today that BP needed a level of certainty that there won’t be claims entertained that are three or four times removed from the oil spill.

But President Obama’s tough talk about BP in his televised address last night earned him plaudits from some leading Democrats, including Senator Dick Durbin of Illinois.

SEN. RICHARD DURBIN, D-Ill.: This president has been very firm and resolute that British Petroleum, this oil company, is going to be held responsible for the damage that’s been done. It will be at their expense, and not at the expense of American taxpayers, that we will help the businesses that are affected and do everything within our power to restore the — the devastation which has occurred to the environment.

JUDY WOODRUFF: On the other hand, Senate Republican leader Mitch McConnell criticized the president for citing the spill in a renewed appeal for energy and climate legislation.

SEN. MITCH MCCONNELL, R-Ky., minority leader: The fact that the White House wants to use this crisis as an excuse to push more of its legislative agenda on the American people, with the same kind of arguments it used to push health care, is really nothing short of startling.

JUDY WOODRUFF: Along the Gulf Coast, reaction to last night’s address was decidedly mixed, including this sampling at a marina in Southern Louisiana.

MAN: In my opinion, he didn’t talk enough about stopping the oil.

MAN: He’s president, and there’s only so much he can do. I mean, everything really is in BP’s hands.

JUDY WOODRUFF: In the Gulf today, BP cranked up a new system to burn up to 400,000 gallons of oil a day. The oil-burning is part of BP’s larger plan to capture or burn 2.2 million gallons a day by the end of the month.

That would be roughly 90 percent of the estimated total flow from the damaged well.