BP Makes It Rain On the Gulf Coast To The Tune Of $20 BILLION
Matt | On 17, Jun 2010
Yesterday, President Obama met with officials and advisers with BP in regards to compensation for the Gulf Coast oil spill. This was a HUGE meeting for the President, who has come under increased scrutiny for a perceived poor handling of the crisis.
The biggest coup of the meeting was with BP setting aside $20 BILLION in funds for disaster claims on the Gulf Coast. **CHA-CHING!!** That is a major piece of good news for the Administration because, as usual, they have taken a major beating in the media about their performance.
Just to paint the picture a little better, the government had only expected $75 million in disaster funds since that is the liability cap under federal law. The extra cash is a needed boost to an area that has been and will be devastated by the millions of gallons of crude leaked into the Gulf.
Here are some brief additional highlights, according to The Wall Street Journal, of Obama’s talks on Wednesday with BP officials:
- The $20 billion is guaranteed whether or not BP goes out of business. They are setting aside U.S. assets now to ensure the delivery of the money by 2013.
- An additional $100 million will be set aside to compensate oil workers who have been sidelined because of the federal moratorium on offshore drilling. BP initially fought this because they felt it was the government’s fault, not theirs, that the moratorium was in place. I see their line of thinking, but they just needed to go ahead and PAY UP!
- Shareholder dividends will be canceled for the first three quarters of 2010 to help pay the $20 billion.
- The same fund administrator from the 9/11 attack fund will handle the BP claims.
- The funds contractually put a legal layer between victims and the company. People can still sue BP, but they have to exhaust all of the monetary channels first.
So, at least in the compensation department, we are making some headway with BP. Oil is still flowing like lava into the Gulf with no end in sight. Work on a relief well could be finished by late August. Officials are also trying (slowly) to collect and skim some of the oil directly out of the water.
The oil saga is still far from over! Sigh…