BP Apologizes and Gives $20 Billion Gulf Fund

June 16, 2010 in Green Living

After the four-hour long meeting today between President Obama and BP’s chairman Carl-Henric Svanberg, the final decision on a $20 billion fund to compensate the victims of the Gulf coast oil rig explosion was reached, as well as an offering from BP to set up an additional $100 million fund for oil rig workers who were laid off.

“Through our actions and commitments, we hope, that in the long run, we will regain the trust that you have in us,” Svanberg said to the American people after leaving the White House meeting.

Obama made it clear in his statement following the meeting that the $20 billion is not a cap. He said “the people of the Gulf have my commitment that BP will meet its obligations to them.” With the costs of civil fines, cleanup and victim’s compensation, some estimate the cost to BP to be stretched into tens of billions of dollars above the agreed upon price. The $20 billion will go towards paying claims from damages that were started by the oil rig explosion. The billions of dollars will come from the dividends BP is suspending that usually go to its shareholders.

The $100 million fund is in addition to the original settlement and was offered by the BP executive without first being prompted by Obama. The six-month moratorium that Obama issued about a month ago suspended deepwater drilling due to the horrific incidents in the Gulf. This laid off countless workers. BP is offering the money as compensation for those workers.

The $20 billion fund will be paid in yearly increments of $5 billion to the third party company that will be overseeing the claims system. Lawyer Kenneth Feinberg, who was the overseer of compensation given to the September 11^th victim’s families, is supervising the entire process.

The apology made by Svanberg came unasked for by Obama or his people. It seemed that Svanberg wanted the people of America to know how deeply sorry he was for being the company behind the largest oil spill in American history.