BP heads have concluded their meeting with President Obama and confirm that the oil giant will suspend payment of shareholder dividends for the rest of 2010 and creation of a $20 billion claim fund..
Several states are affected by the US's worst environmental disaster
Instead of the dividend payment the oil giant will place $5 billion in an independently administered fund this year to help offset environmental and economical damage.
Starting in 2011, BP will then deposit $1.25bon per quarter into the fund until it reaches a total of $20bn.
Excluding accrued interest, that means the fund will not reach the figure agreed to with Mr Obama, until the end of 2013.
In a sign of the president's displeasure over the environmental disaster in the Gulf of Mexico, Mr Obama held an earlier press conference by himself, with no BP executives present.
Mr Obama said: "I think today was a good start and should provide some assurance to the small businesses that BP is going to meet its responsibilities."
Afterwards, BP Chairman Carl-Henric Svanberg said: "We appreciate the deep concern that he feels for the people in the region and you can hear in his speech, his frustration."
"We will repair the evironmental damage to this region and to the economy," Svanberg said.
BP CEO Tony Hayward, who has been criticised in the US for flippant comments during the disaster, did not speak and instead stood behind Svanberg at the press conference.
Mr Obama recognised that the financial cost to the oil giant will significantly impact its cash flow.
"BP's liabilities for this spill are significant and they acknowledge that fact. We will continue to hold BP and others responsible and liable," Mr Obama said.
BP revealed it has over $10bn of committed banking facilities and will sell assets to help sustain cash liquidity during the crisis, which is expected to have impact for years to come.
Concerns continue to be aired in the US that BP could be bankrupted by the liabilities it is now carrying.
In a statement, BP said: "To further increase the company's available cash resources, the Board intends to implement a significant reduction in organic capital spending and to increase planned divestments to approximately $10bn over the next twelve months."
White House officials confirmed that after the main meetings between authorities and BP heads lasted for four hours.
Mr Obama was involved in a 20-minute meeting with both sides and then had a 25-minute one-to-one meeting with Mr Svanberg in the Oval Office.
During the meeting with Mr Obama BP executives apologised personally to the President for the disaster.
Experts now estimate the leak at 60,000 barrels a day
The Office of Energy and Climate's Carol Browner said the fund figure was decided upon today as an initial compensation figure.
"It was starting with a fund that would be adequate to meet liabilities," she said.
White House spokesman Robert Gibbs stressed that the fund figure is not an upwardly negotiable if the cleanup bill from the spewing well exceeds $20bn.
"This does not limit or cap the damages or BP's responsibilities," Mr Gibbs said.
After the meeting one Republican senator complained that it has taken nearly two months for this high-level meeting between oil men and officials to be held.
"This should have happened within the first week of the disaster," South Carolina Senator Jim Demint said.
"I'm just glad the president is getting involved now."
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Several states are affected by the US's worst environmental disaster
Instead of the dividend payment the oil giant will place $5 billion in an independently administered fund this year to help offset environmental and economical damage.
Starting in 2011, BP will then deposit $1.25bon per quarter into the fund until it reaches a total of $20bn.
Excluding accrued interest, that means the fund will not reach the figure agreed to with Mr Obama, until the end of 2013.
In a sign of the president's displeasure over the environmental disaster in the Gulf of Mexico, Mr Obama held an earlier press conference by himself, with no BP executives present.
Mr Obama said: "I think today was a good start and should provide some assurance to the small businesses that BP is going to meet its responsibilities."
Afterwards, BP Chairman Carl-Henric Svanberg said: "We appreciate the deep concern that he feels for the people in the region and you can hear in his speech, his frustration."
"We will repair the evironmental damage to this region and to the economy," Svanberg said.
BP CEO Tony Hayward, who has been criticised in the US for flippant comments during the disaster, did not speak and instead stood behind Svanberg at the press conference.
Mr Obama recognised that the financial cost to the oil giant will significantly impact its cash flow.
"BP's liabilities for this spill are significant and they acknowledge that fact. We will continue to hold BP and others responsible and liable," Mr Obama said.
BP revealed it has over $10bn of committed banking facilities and will sell assets to help sustain cash liquidity during the crisis, which is expected to have impact for years to come.
Concerns continue to be aired in the US that BP could be bankrupted by the liabilities it is now carrying.
In a statement, BP said: "To further increase the company's available cash resources, the Board intends to implement a significant reduction in organic capital spending and to increase planned divestments to approximately $10bn over the next twelve months."
White House officials confirmed that after the main meetings between authorities and BP heads lasted for four hours.
Mr Obama was involved in a 20-minute meeting with both sides and then had a 25-minute one-to-one meeting with Mr Svanberg in the Oval Office.
During the meeting with Mr Obama BP executives apologised personally to the President for the disaster.
Experts now estimate the leak at 60,000 barrels a day
The Office of Energy and Climate's Carol Browner said the fund figure was decided upon today as an initial compensation figure.
"It was starting with a fund that would be adequate to meet liabilities," she said.
White House spokesman Robert Gibbs stressed that the fund figure is not an upwardly negotiable if the cleanup bill from the spewing well exceeds $20bn.
"This does not limit or cap the damages or BP's responsibilities," Mr Gibbs said.
After the meeting one Republican senator complained that it has taken nearly two months for this high-level meeting between oil men and officials to be held.
"This should have happened within the first week of the disaster," South Carolina Senator Jim Demint said.
"I'm just glad the president is getting involved now."
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