Obama to ask for special BP claims fund over oil spill

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Monday, June 14, 2010

US President Barack Obama, in response to criticism over his handling of the ongoing Gulf of Mexico oil spill, has asked the oil company BP to create a special fund with "substantial" amounts of money to pay claimants over the disaster.

Obama is to make his fourth visit to the Gulf Coast tomorrow, and on Tuesday is scheduled to make a speech about efforts to address the spill.

In a television interview earlier today, the president's senior strategist David Axelrod commented that "[w]e want to make sure that money is escrowed for the legitimate claims that are going to be, and are being made, by businesses down in the Gulf and we want to make sure that that money is independently administered so that [BP] won’t be slow-walked on these claims," he added.

The oil spill has poured at least a million barrels of oil into the Gulf since the Deepwater Horizon oil rig blew up on April 20. The oil has now reached the shores of the southern US, and affected many fishermen, oil workers, and business operators in the area.

Senior officials from the Gulf states of Florida and Louisiana both want the oil company to put $7.5 billion into the proposed fund. Officials from neighbouring states also affected by the spill, such as Texas, Alabama, and Mississippi, haven't yet announced how much they want put into the fund.

BP's board of directors, meanwhile, is to hold an emergency meeting tomorrow to talk about compensation to those affected. Some economic analysts have suggested that cleanup costs and compensations could drive the company into bankruptcy, although BP commented yesterday that it was "not in discussions with" and had "not engaged any bankruptcy experts". According to the Los Angeles Times, as of March 31, BP had the equivalent of $6.8 billion in cash available on hand.