Obama, BP reach agreement on $20b oil spill fund 

The chairman of BP apologized for causing the catastrophic oil disaster on the Gulf Coast, saying "we care about the small people" and promising to pay up.

"I hear comments sometimes that large oil companies are greedy companies or don't care, but that is not the case in BP," board chairman Carl-Henric Svanberg said after a four-hour meeting with President Obama.

A clutch of company officials arrived at the White House for what was supposed to be less than 20 minutes with the president and top administration officials.

Hours later, both sides emerged from the Roosevelt Room with a deal in hand for the oil giant to create a $20 billion fund to compensate victims of the spill.

In carefully scripted, back-to-back appearances, Obama announced the deal in the State Dining Room, and Svanberg appeared with other BP executives on the West Wing driveway to speak to reporters.

"I would like to take this opportunity to apologize to the American people on behalf of all the employees in BP, many of whom are living on the Gulf Coast," Svanberg said. "Through our actions and commitments, we hope that, over the long term, we will regain the trust that you have in us."

BP officials are in Washington making a tour of contrition for the company's handling of the spill, which on Wednesday marked its 57th day. CEO Tony Hayward attended the meeting with Obama but did not speak to reporters.

Obama said those affected by the spill making a claim for part of the $20 billion will not give up their right to sue BP -- an issue that had previously stalled progress on setting up the escrow account.

"BP's liabilities for this spill are significant," Obama said. "They acknowledge that fact. And we will continue to hold BP and all other responsible parties accountable."

Attorney Kenneth Feinberg, who headed up an earlier program compensating the families of the victims of the Sept. 11, 2001, terrorist attacks and played a role in executive pay issues rising from the bank bailout, will be the independent manager of the BP escrow fund.

The announcement and dramatic apology showed careful orchestration by the White House and BP, parties deeply at odds but sharing the goal of improving their respective public relations in disaster response.

Svanberg said the company would cancel its quarterly dividend for the rest of the year, an issue that had become a flashpoint for lawmakers and others.

In his remarks, Obama offered measured praise of BP, saying he is confident the company will meet its obligations.

BP stock has lost half of its value since the April 20 fire and explosion that sunk the Deepwater Horizon oil rig and touched off the nation's worst environmental disaster.

The sit-down follows Obama's Oval Office address aimed at demonstrating the administration's command of the crisis and plan for solving the problem -- a case the administration hopes was made stronger by the lengthy meeting and escrow deal.


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