BP Agrees to Set Aside About $20 Billion for Spill Claims

[ProSense]

Source: New York Times

WASHINGTON — The White House and BP tentatively agreed that the oil giant will create a $20 billion fund to pay claims for the worst oil spill in American history, to be independently run by the mediator who oversaw the 9/11 victims compensation fund, Kenneth Feinberg, according to two people familiar with the deliberations.

The agreement was not final and was still being negotiated when President Obama and his top advisers met this morning with BP’s top executives and lawyers. Its preliminary terms would give BP several years to deposit the full amount into the fund so it could better manage cash flow, maintain its financial viability and not scare off investors.

The talks have been complicated by the fact that BP’s ultimate liabilities for the cleanup and lost business are unknowable since the two-month-old leak of its well in the Gulf of Mexico could well be spewing some oil for months more. To date, BP has spent more than $1 billion on containment, cleanup and claims from the Coast Guard, fishermen, oil workers and other businesses from Louisiana to Florida.

The negotiations since late last week have been closely held given the market sensitivity for BP, whose stock has lost about half its value. BP’s next dividend for shareholders is another issue on the table. Some members of Congress have called for blocking any dividend payments, though the legality of such action is in dispute, or for putting the dividend in another escrow account pending payment of claims to victims. Either option would be problematic for many institutional investors and pension funds with stock in BP.


Read more: http://www.nytimes.com/2010/06/17/us/politics/17obama.html?hp

[FrenchieCat]

1. Yeah.... got those assholes to put aside 20 Billion!

But other than that, the President ain't worth shit! :sarcasm:

[CatWoman]

6. LOL, Frenchie

:)

I heard, on good authority, that Aqua Man was pissed at Obama. That's why he refused to help stem the oil leak.

[CountAllVotes]

2. good on you Pres. Obama

:thumbsup: for getting some needed money for the Gulf!

:kick:

[eowyn_of_rohan]

3. $20 Billion X 10

Plus JAIL TIME

[MineralMan]

4. In due course. The investigations have just begun.

More money will be needed, and we'll get it. BP is going to have to pay. We just have to make sure we don't put them completely out of business. They can't pay in that case. It's a balance.

[texanwitch]

5. Not enough but a start.

They need to do that every month for a least a year.

[Iliyah]

8. On CNN

they are putting verbal messages about Pres O's speech last night, most are pleased, but one had me scratching my head. This caller said what he got from the speech was "Pres O is going to raise his taxes"

[dhill926]

9. the brainwashing runs deep.......n/t

[Lone_Star_Dem]

12. They watched the FOX post show.

Gov. Barbour's head was exploding over the cap-and-trade tax. This person must have just heard the word tax and decided his were going up.

[Scurrilous]

7. K & R

:thumbsup:

[Are_grits_groceries]

10. Its preliminary terms would give BP several years to deposit the full amount into the fund

fine print...

[dipsydoodle]

11. Read my sig line which has been there for ages

courtesy of Tom Waits.

The fine print you mention helps ensure BP's well being because without that there are no future funds.

[Are_grits_groceries]

13. And what if they come back in 'several years'

and say they can't make the payments if they aren't allowed to drill at X or some other condition. How is this going to be nailed down in any way?

'Several years' is a nebulous term.

[dipsydoodle]

17. Unlikely I'da said to be based

on the example you used. Soon as they've got the well under control they've got that income for starters.

[Kber]

14. a couple of "fine print items" from page two of the article...

this...

"If the new range of flow estimates proves correct, and if BP is ultimately found guilty of gross negligence in actions it took that led to the Deepwater Horizon disaster, that would mean the company could be assessed fines of up to $258 million a day. Those fines could come on top of payments for cleanup costs and economic damage to Gulf Coast businesses."


and this...

"BP officials are adamant that the company should not be liable for the lost wages of oil workers laid off because of the six-month moratorium that the Obama administration imposed on deepwater offshore drilling after the Deepwater Horizon explosion and fire. But Interior Secretary Ken Salazar and other administration officials repeatedly have cited idled oil workers as among those who could press claims."


and lastly, this...

"To make sure that all claims are paid, the administration had demanded that BP set aside money to pay for future liabilities before paying dividends to shareholders, which now amount to about $10.5 billion a year."

[dipsydoodle]

18. Won't be up to Salazar

regardless of what he says or thinks. It will be solely up to the independant controller of the ecsrow fund to decide the merit or otherwise of claims.

[grahamhgreen]

30. So that's 20 bil in escrow PLUS 15+ billion in fines (258m/day), I hope.

[Frank Booth]

15. Why did Obama pick the same asshole who unilaterally decreed

that certain 9/11 victims' lives were worth many times those of other victims? I don't think choosing a guy who's incapable or unwilling to think beyond the concept of economic loss is a reasonable decision.

[Aslanspal]

16. A victory for Obama...good thing after that average speech

Hope he gets a bounce , but things are so bad these days.

[valerief]

19. Wonder if the Reichwing SCOTUS can water that down to 2 million. nt

[Amerigo Vespucci]

20. White House, BP agree on oil spill damage fund; company to pay $20 billion

Source: L.A. Times

Reporting from Washington —
The Obama administration has reached a preliminary agreement with BP executives that would see the oil company pay $20 billion over several years into an independently controlled escrow account to be established to compensate Gulf of Mexico residents affected by the disastrous oil spill.

The agreement was negotiated in a meeting at the White House on Wednesday morning, the first face-to-face gathering between President Obama and senior BP leadership. A White House official said that, under the terms of the deal, the fund would be administered by attorney Kenneth Feinberg, currently serving as the special master for executive pay under the Troubled Asset Relief Program. Feinberg ran a fund that compensated victims of the terrorist attacks of Sept. 11, 2001.

The meeting comes 57 days after the April 20 explosion at BP's Deepwater Horizon oil rig. Prior to Wednesday, Obama had yet to speak with BP Chief Executive Tony Hayward. Half a dozen other BP executives joined a phalanx of Cabinet and senior administration officials in the meeting in the Roosevelt Roo. It was not yet known how long the president remained at the meeting. Obama was scheduled to address reporters in the Rose Garden this afternoon.

Wednesday's session was the final piece in a choreographed three-day series of events intended to showcase Obama's handling of the gulf oil crisis. He made his fourth visit to the gulf region, with stops Monday in Mississippi and Alabama and Tuesday in Florida. After returning to Washington, he delivered his first address to the nation from the Oval Office, outlining what he called a "battle plan" for cleaning up the spill, providing assistance for those affected and, ultimately, to "make sure that a catastrophe like this never happens again."

Read more: http://www.latimes.com/news/nationworld/nation/la-na-bp-white-house-20100617,0,6403086.story

[Tansy_Gold]

21. Does this mean the damages are capped at $20B? n/t

[GOTV]

35. It is not supposed to be a cap. Then again they have several years to pay ...

... so there's plenty of time to adjust that figure down after the spot lights have been turned off.

[av8rdave]

22. I'm no numbers expert, and I'm admittedly pulling this out of my @$$, but...

why do I get the feeling that $20B won't even come close.

BP has to be thrilled that they have a cap on liability.

Here's hoping for some BLISTERING lawsuits to follow.

[Larkspur]

23. It's a start, now Obama needs to order BP to stand down and let journalists do their job

documenting the damage in the Gulf. And he needs to have the Federal government take over the cleanup crews so that workers wear proper haz mat suits and have training so that they don't march right through bird nesting areas and stomp on eggs.

[totodeinhere]

24. The thing is, Obama is a president, not a dictator.

I would like to see BP allow unfettered access to all journalists. I agree with that. But by what authority could Obama order them to do it?

[grahamhgreen]

29. The constitution of the US.

[Larkspur]

32. Obama can enforce the First Amendment rights of the Press and citizens

The President is the Enforcer of the law and the First Amendment is part of the law.

[totodeinhere]

37. The First Amendment doesn't require that companies allow press access if they don't want to.

The First Amendment stops the government from infringing on freedom of speech or infringing on freedom of the press. It protects the citizens from the government. The Supreme Court has held that this applies to local governments as well as the federal government. But it doesn't work the other way around. It does not require that private individuals or corporations provide information to the press if they don't want to.

[Larkspur]

38. BP doesn't own the public beaches or the marshes

so BP has NO RIGHT to chase journalists from doing their job. Obama could charge BP with assault on the journalists.

[totodeinhere]

40. My point was that Obama does not have the power to order BP to give unfettered access to

journalists. That doesn't mean that BP has the right to chase reporters off from public lands. But BP doesn't have to cooperate with the journalists or give them interviews if they don't want to.

BTW, you did not address my point about the Second Amendment.

[Larkspur]

41. Why the 2nd Amendment?

I was talking about the First one

[totodeinhere]

42. I meant the First Amendment as I indicated in my previous post.

Sorry.

[Yeahyeah]

25. .

[h9socialist]

26. I doubt that we'll know the real number for years

And the proof-in-the-putting needs to be the wording of the agreement -- specifically, what sort of re-openers are possible in order to modify the amount of the settlement in the future.

[WHEN CRABS ROAR]

27. BP will pay $20 billion? That figure won't be enough.

Stop dancing around the subject of how much and who pays, we already know who will pay, it's the entire ecosystem and all of us that will pay!

[Paper Roses]

28. Get that $ into an escrow account ASAP. Hope the administrators of this

fund pay claims in a reasonable time, not a lifetime.

I am skeptical of this. Bet it is so bogged down with paperwork that it will be forever before anyone is reimbursed. Can't eat and pay the bills on promises of a better tomorrow.

[GOTV]

34. They will be given "several years" to pay into the fund - so who knows ....

... if the money will ever arrive.

When the banksters needed money it arrived very quickly.

[inna]

31. Is that in addition to fine for oil spill by barrel? That alone approaches $30 billion.

[Zorra]

33. Let's see...that works out to be around $1.4 billion after appeals are exhausted.

(Calculations based on Exxon Valdez oil spill payouts)

[ProSense]

36. Details

here.

[Stuart G]

39. It will not be enough..you will see. we will need at least ten

times that..200 Billion ..BP will be gettting away.with murder..oh, that is what they did..didn't they?