The Obama administration said the oil giant is in dicusssions over the multibillion-dollar compensation fund, which would be overseen by an independent third party. Administration officials also said the White House was confident it could force BP to create the fund if needed.
BP appears willing to meet an Obama administration demand to establish a multibillion-dollar victims' compensation fund for those affected by the Gulf oil spill, an administration spokesman said Monday.
The announcement came as President Obama began his fourth visit to the three-states Gulf region hardest hit by the spill. Administration spokesman Bill Burton told reporters on Air Force One en route to the Gulf region that the White House and BP were "working out the particulars" of the fund, such as the amount, which he said would be "billions of dollars" and how it would be administered.
"We're confident that this is a critical way in which we're going to be able to help individuals and businesses in the Gulf area become whole again," Burton said.
Burton said the account would be run by an independent third-party entity. White House officials are "confident we have the legal authority" to force BP to establish the account, he said.
BP's board was meeting Monday in London to discuss deferring its second-quarter dividend and putting the money into escrow until the company's liabilities from the spill are known. BP spokeswoman Sheila Williams had said earlier that the company was aware of the White House's demand for a compensation fund, but declined to comment further.
Obama is expected to press BP to set up the fund when he meets with company executives Wednesday.
Senate Democrats want BP to set aside $20 billion to pay for damages stemming from the April 20 Deepwater Horizon rig explosion. In a letter to BP CEO Tony Hayward, the lawmakers, led by Senate Majority Leader Harry Reid, gave the company until Friday to respond.
"History has taught us that corporations often fail to live up to their initial promises," the lawmakers wrote. Fulfilling the company's promises could do more to restore BP's public image than what they said was a "costly public relations campaign."
Meanwhile, Britain's energy and climate change secretary, Chris Huhne, told Parliament on Monday that BP "remains a strong company," despite having lost much of its market capitalization and the looming cost of the cleanup and compensation to individuals.
"Although its share price has fallen sharply since April, the company has ... exceptionally strong cash flow and will continue to be a major employer and vital investor here and in the United States," he added.
NPR's Scott Horsley, David Welna and Korva Coleman contributed to this report, which also includes material from The Associated Press Copyright 2010 National Public Radio. To see more, visit http://www.npr.org/.