Under a preliminary agreement with the Obama administration, BP will put $20 billion in an escrow account to pay claims from the Gulf Coast oil spill.
Kenneth Feinberg, the lawyer who oversaw the compensation fund for 9/11 victims, will administer the BP account.
The terms of the agreement require BP to deposit money into the fund twice this year, and then again each quarter until the account reaches $20 billion. The company will also start a $100 million fund for unemployed oil industry workers.
BP has already spent more than a billion dollars on claims, clean-up and containment, The New York Times reports. Carl-Henric Svanberg, the company’s chairman, told reporters that BP would not pay dividends for the rest of the year.
The new agreement comes a day after officials raised the estimate for the amount of oil spewing into the Gulf Coast to as much as 60,000 barrels per day. The new figure is approximately double last week’s estimates of 25,000 to 30,000 barrels.
The containment cap that was put into place on July 3rd is now collecting about 15,000 barrels of oil per day. BP also announced today that it is implementing a new technique to collect oil from the well by using one of the lines from the failed “top kill” operation. The company said the line is already collecting oil. According to the Post, at best the new technique could recover 10,000 gallons of oil per day.

