The US Justice Department and BP have announced that they have finished negotiations to implement a 20 billion dollar (£12.53 billion) fund for victims of the Gulf oil spill and that BP has made a three billion dollar (£1.9 billion) initial deposit.
Associate Attorney General Tom Perrelli said the department is pleased that BP made an initial contribution and had taken "an important step towards honouring its commitment to the President and the residents and business owners in the Gulf region."
Mr Perrelli said the company still needs to ensure that all the necessary funds will be available if something happens to the BP subsidiary that established the trust, and that the Justice Department looks forward to completing an appropriate security arrangement in the near future.
Bob Dudley, CEO of BP's Gulf Coast Restoration Organisation, said that establishing the trust and "making the initial deposit ahead of schedule further demonstrates our commitment to making it right in the Gulf Coast." BP had said it would make the deposit by the end of September.
An additional two billion dollars (£1.25 billion) deposit will be made in the fourth quarter of 2010. Thereafter, 1.25 billion dollars (£780 million) will be deposited per quarter until the 20 billion dollars has been deposited.
Kenneth Feinberg, the Obama administration's pay czar, takes over processing claims from the 20 billion dollar (£12.53 billion) oil spill compensation fund later this month.
BP announced that two trustees will administer the account - John S Martin, a former US District Judge for the Southern District of New York, and Kent Syverud, Dean of the Washington University School of Law.