By Deirdre Robert
Posted on June 17, 2010. Listed in:
NZ$28 billion apparently.
It’s been just over eight weeks since the explosion of a BP drill rig sent barrels and barrels of oil gushing into the Gulf of Mexico. Estimates range from just over 1000 barrels per day to a whopping 21, 500, depending on whom you talk to. Whatever the number, it’s a lot. Now, after a four-hour meeting between BP’s chairman Carl-Henric Svanberg and President Barack Obama, BP is set to gush the NZ$28billion into a fund to help to pay for the damage wreaked by the leak.
In statement on the oil giants website following Svanberg’s meeting with Obama, Chief Executive Tony Hayward makes quite the debatable statement:
“From the outset we have said that we fully accepted our obligations as a responsible party.”
Notwithstanding the questionability of this statement, Obama called yesterday’s meeting a good start and hopes the actions will go some way in reassuring small business owners and individuals that BP is going to meet it’s obligations.
“BP’s liabilities for this spill are significant -- and they acknowledge that fact. We will continue to hold BP and all other responsible parties accountable,” says Obama.
The fund will be directed by lawyer Kenneth Feinberg, who oversaw payments to families of victims of the September 11 terrorist attacks, and will be paid in increments of $5 billion per year until the $20 billion amount it met.
However, Obama is quick to point out that the $20 billion is by no means the be-all and end-all.
“This $20 billion will provide substantial assurance that the claims people and businesses have will be honored. It’s also important to emphasize this is not a cap.”
Svanberg says that in a bid to help meet its financial obligations, BP is suspending its dividends to shareholders.
“This agreement is a very significant step in clarifying and confirming our commitment to meet our obligations. We regret the cancellation and suspension of the dividends, but we concluded it was in the best interests of the Company and its shareholders."
As part of the agreement, BP will also establish a $100 million fund to compensate unemployed oil rig workers affected by the closure of the deepwater rigs.
BP Chief Executive Tony Hayward says BP has received the president’s message loud and clear.
“The President made it clear and we agree that our top priority is to contain the spill, clean up the oil and mitigate the damage to the Gulf coast community. We will not rest until the job is done."
Looks like there won't be rest for the wicked anytime soon.
Image: Flickr - Mr Jaded
