Obama gets BP to provide $20bn for oil spill claims
Barack Obama has successfully pushed BP into agreeing in principle to place roughly $20bn (£13bn) into a specially created account to settle claims arising from the Deepwater Horizon catastrophe. It will be managed not by the British oil company but by a Presidential appointee.
The highly unusual concession by a private corporation was agreed during almost three hours of talks at the White House between Mr Obama, with several senior cabinet members and advisers, and the chairman and chief executive of the London-based energy giant, Carl-Henric Svanberg and Tony Hayward.
Forcing BP to put billions into an independently managed account was one of the key pledges made by Mr Obama in his first Oval Office address to the nation on Tuesday.
Anything less from yesterday's meeting could have spelled political disaster for the White House.
If the deal sticks, the fund will be overseen by Kenneth Feinberg, a lawyer previously chosen to oversee payments to the families of victims of the September 11 attacks on the US.
A politically damaging theme of recent weeks has been BP's halting response to the growing list of claims submitted by citizens and businesses of all kinds along the US Gulf coast, from tourist entrepreneurs to shrimpers and oil industry workers.
Even as word of a deal leaked from the White House, sources said negotiations dragged on much longer than scheduled as both sides finalised details, notably a commitment from BP that it will dig deeper should the original allotment of $20bn prove insufficient in the months and years to come.
Although BP has already spent more than $1bn responding to the spill, it is impossible to predict how big the claims will become — a fact that has helped to push down the company's share price so dramatically.
As the political drama played out in Washington, BP said a second system to siphon oil from the seabed of the Gulf of Mexico had successfully started.
After more than a week collecting roughly 15,000 barrels a day from the wrecked well, BP is under pressure to increase that figure.
In yet another revision of flow-rate estimates, government scientists said on Tuesday that as much as 60,000 barrels a day might have been released by the blowout on 20 April.
The second system now in place should collect 28,000 barrels a day, BP engineers said.
It is siphoning the additional oil through hoses attached to the broken blowout preventer on the sea floor. Once at the surface, the oil is being burned off.
BP has said it means to push its collection capacity to 80,000 barrels a day by mid-July.