1 Boring Old Man

BP to Suspend Dividend and Set Up Fund for Oil Spill Claims
The New York Times
By JACKIE CALMES and HELENE COOPER
June 16, 2010

WASHINGTON — The White House and BP agreed on Wednesday that the oil giant would create an independent $20 billion fund to pay claims arising from the worst oil spill in American history. Bowing to pressure from the Obama administration, the company also said it would suspend paying dividends to its shareholders for the rest of the year and would compensate oil field workers for lost wages.

The $20 billion compensation fund will be run by Kenneth Feinberg, the mediator who oversaw the 9/11 victims compensation fund. President Obama announced the agreement to reporters at the White House Wednesday afternoon, after he and his top advisers met in the morning with BP’s top executives and lawyers to finalize the agreement. After the president’s remarks, the chairman of BP, Carl-Henric Svanberg, announced the dividend suspension. Mr. Svanberg apologized “to the American people” for the disaster and said that BP would “look after the people affected, and we will repair the damage to this region and the economy.”

Separately from the $20 billion fund, BP agreed to set aside $100 million to compensate oil field workers who have been idled by the moratorium on deepwater drilling, which the administration imposed after the explosion and fire April 20 that destroyed a BP drilling rig in the Gulf of Mexico and led to the spill. The company initially resisted compensating those workers because the moratorium was not its decision.

Mr. Svanberg said that it was clear from the meeting Wednesday at the White House that the president was “frustrated because he cares about the small people,” he said. “And we care about the small people. I hear comments sometimes that large oil companies are greedy companies or don’t care. But that is not the case indeed. We care about the small people.” Mr. Obama said he had instructed Mr. Feinberg to remind BP executives and shareholders of those desperate people in the Gulf who, “if they don’t get relief quickly, may lose their businesses that have been in their families for two or three generations”…

“I am absolutely confident that BP will be able to meet its obligations to the Gulf Coast,” Mr. Obama said. The talks over setting up the fund were 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 be spewing oil for months more. “It is important to emphasize this is not a cap,” Mr. Obama said of the $20 billion amount. Neither would the agreement pre-empt people from using the courts to settle disputes with BP over the spill, he said. 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…

1. Dive into the oil spill committing government resources.
2. Insist that BP shoulder the liability and the clean-up duty.

1. Obama is a big government spender. Here he goes, bailing out private industry.
2. Obama is too laid back, not responsive to the people, relying on industry.