BP pays £3bn into escrow fund as spill claims add up
Tuesday 10 August 2010
BP yesterday paid the first $3bn installment into its $20bn escrow fund, which was set up two months ago to meet liabilities stemming from the Gulf of Mexico oil leak.
The embattled energy giant is likely to face huge claims and fines as lawyers set to work on thousands of legal actions. BP said it had already met about 145,000 claims, spending $319m (£200m) on compensation with almost $6bn going towards blocking the leaking Macondo well, and on the wider clean-up operation.
"The purpose of the escrow account was to assure those adversely affected by the spill that we indeed intend to stand behind our commitment to them and to the American taxpayers," said Bob Dudley, who is set to take over as BP's chief executive later this year. "Establishing this trust and making the initial deposit ahead of schedule further demonstrates our commitment to making it right in the Gulf Coast."
The US Government estimates that almost five million barrels of oil leaked into the Gulf after an explosion on the Deepwater Horizon rig on 20 April, which killed 11 workers. BP says its effort to scoop up oil from the surface of the sea has recovered about 826,000 barrels of crude. Yesterday's update detailing the cost of the disaster – without taking the escrow fund into account – was the first for three weeks, during which time the cost of the spill has increased by more than $2bn. Estimates of how much the accident will eventually cost BP vary, with guesses from anywhere between $20bn and $100bn.
BP insisted yesterday that no oil had leaked from the well since 15 July when it was capped. Last Thursday, the company carried out a procedure known as "static kill" that involved pumping a cocktail of substances, including cement, into the well to block it permanently. According to Thad Allen, the US administration's senior official in the region, the cement has now hardened. This will allow BP to drill the final 100ft of a relief well which is designed to ease the pressure.
Once connected, the relief well will also be pumped with cement, finally sealing the wellhead.
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