Under intense pressure from President Barack Obama, BP Plc agreed on Wednesday to set up a $20 billion fund for claims from its huge Gulf of Mexico oil spill and suspended dividend payments to its shareholders. Obama announced the deal on the special fund after White House officials held four-hour talks with BP executives on the 58-day-old oil spill crisis. He said the money would go toward making the Gulf Coast “whole again.” Obama, who has been criticized by some for not being tough enough on BP, demanded in the White House meeting that the company set aside money in an independently administered fund to pay for claims arising from the worst oil spill in US history. An April 20 explosion on an offshore rig owned by the British energy giant killed 11 workers and ruptured a deep-sea well. The ensuing spill has fouled 120 miles (190 km) of US coastline, imperiled multibillion-dollar fishing and tourism industries and killed birds, sea turtles and dolphins. In a conciliatory statement outside the White House, BP chairman Carl-Henric Svanberg apologized to the American people on behalf of BP. “I do thank you for the patience that you have during this difficult time,” he said. “I hear comments sometimes that large oil companies are greedy companies who don't care, but that is not the case in BP, we care about the small people,” Svanberg said. He said BP's board had agreed not to pay dividends this year and promised to make sure damage claims were handled swiftly and fairly. BP said in a statement it would cut three quarters of dividends, significantly reduce its investment program and sell $10 billion of assets to fund a planned $20 billion fund to pay for the oil spill. The White House said it did not believe that BP would have agreed to set up the special fund without pressure. Obama had called for such a third-party administered fund after hearing first-hand complaints from Gulf coast residents that BP's claims process was too long and complicated and that the company was paying out too little money. Obama said BP had also agreed to set aside $100 million for workers who had lost jobs because of a six-month moratorium his administration imposed on deepwater drilling after the spill. Kenneth Feinberg will administer the BP escrow fund, Obama said. Feinberg was the “pay czar,” the official who oversaw compensation for executives at companies that received federal bailout funds. Feinberg also oversaw a compensation fund for victims of the 2001 attacks on the US.
