Source: BP

Release date: 16 June 2010

Following a meeting with the President of the United States, the BP Board announces an agreed package of measures to meet its obligations as a responsible party arising from the Deepwater Horizon spill.

Agreement was reached to create a $20bn claims fund over the next three and a half years on the following basis:

BP will initially make payments of $3bn in Q3 of 2010 and $2bn in Q4 of 2010. These will be followed by a payment of $1.25bn per quarter until a total of $20bn has been paid in.

While the fund is building, BP’s commitments will be assured by the setting aside of U.S. assets with a value of $20bn. The intention is that this level of assets will decline as cash contributions are made to the fund.

The fund will be available to satisfy legitimate claims including natural resource damages and state and local response costs. Fines and penalties will be excluded from the fund and paid separately. Payments from the fund will be made as they are adjudicated, whether by the Independent Claims Facility (ICF) referred to below, or by a court, or as agreed by BP.

The ICF will be administered by Ken Feinberg. The ICF will adjudicate on all Oil Pollution Act and tort claims excluding all federal and state claims.

Any money left in the fund once all legitimate claims have been resolved and paid will revert to BP.

The fund does not represent a cap on BP liabilities, but will be available to satisfy legitimate claims. Further and more detailed terms regarding the establishment and operation of the claims fund and the ICF will be finalized and announced as soon as possible.

As a consequence of this agreement, the BP Board has reviewed its dividend policy. Notwithstanding BP’s strong financial and asset position, the current circumstances require the Board to be prudent and it has therefore decided to cancel the previously declared first quarter dividend scheduled for payment on 21st June, and that no interim dividends will be declared in respect of the second and third quarters of 2010.

The Board remains strongly committed to the payment of future dividends and delivering long term value to shareholders. The Board will consider resumption of dividend payments in 2011 at the time of issuance of the fourth quarter 2010 results, by which time it expects to have a clearer picture of the longer term impact of the Deepwater Horizon incident.

The Board believes that it is right and prudent to take a conservative financial position given the current uncertainty over the extent and timing of costs and liabilities relating to the spill. BP’s businesses continue to perform well, with cash flows from operations expected to exceed $30bn in 2010 at current prices and margins before taking into consideration costs related to the Deepwater Horizon spill. BP’s gearing level remains at the bottom of its targeted band of 20-30 per cent. In addition, the Company has over $10bn of committed banking facilities. 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.

Chairman Carl-Henric Svanberg said: “We appreciated the constructive meeting conducted by the President and his senior advisers and are confident that the agreement announced today will provide greater comfort to the citizens of the Gulf coast and greater clarity to BP and its shareholders. We welcome the administration’s statements acknowledging that BP is a strong company and that the administration has no interest in undermining the financial stability of BP. This agreement is a very significant step in clarifying and confirming our commitment to meet our obligations. We regret the cancellation and suspension of the dividends, but we concluded it was in the best interests of the Company and its shareholders.”

Chief Executive Tony Hayward said: “From the outset we have said that we fully accepted our obligations as a responsible party. This agreement reaffirms our commitment to do the right thing. The President made it clear and we agree that our top priority is to contain the spill, clean up the oil and mitigate the damage to the Gulf coast community. We will not rest until the job is done.”

The second half of the speech was unnecessary at the moment and came across as political opportunism.

I don’t doubt for one second that Obama believes it when he says this country is addicted to oil and that energy independence and a clean energy future are strategically – perhaps existentially – critical goals for the United States.

I don’t think tonight was the time because now is the time for the nation to be laser-focused on our neighbors’ travails on the Gulf Coast.  Everyone knows that the Obama Administration’s commitment to clean energy and a green economy is only rivaled by its commitment to health care reform.  It wasn’t necessary tonight to take the focus off of the immediate task, even for the eight minutes or so the president discussed national energy policy.  And, that energy policy is a politically divisive topic as it is currently framed.  Evil, multi-national oil companies and terrorists on one side vs. Smart Car drivin’, Birkenstock wearin’ idealists on the other.  It’s just not fair to the people of Louisiana, Alabama and Mississippi to have to share their moment with the Cap and Trade debate.

Finally, this:

Now is the moment for this generation to embark on a national mission to unleash American innovation and seize control of our own destiny.

I can’t tell you how long I’ve waited for a president of the United States of America to utter words to that effect regarding energy policy in this country.  Tonight, though, they rang hollow.  I’m watching this live feed of black and brown shit jetting, pouring into the Gulf of Mexico at the revised-again rate of 65-100 thousand barrels per day.   Anderson Cooper is on TV with not just oil-slicked birds, but the eggs of brown pelicans – recently stepped on by “BP cleanup workers.”  Keith Olbermann actually screamed “Goddammit” last night on Countdown. (That was actually about something else.) One crisis at a time, please!

The time for the second half of tonight’s speech would have been after the black gold is no longer boiling out of the bottom right hand corner of my flat screen.  It’s just so politician.  If we have a chance to ring the bell, what the hell, ring it.  Ginning up the Manhattan Project rhetoric for the energy future falls flat when there’s no plan or funding behind the Project.  This clean, independent energy future is too important for the country to put folks to sleep with it by unleashing the grandiloquence without an Apollo Program-like effort ready to blast off in support of the goal.

Let’s hope that after tonight Washington concentrates on the tasks at hand – economic and environmental – in repulsing the plumes emanating from BP’s disaster.  At the appropriate time, when our leaders’ attention can be fully engaged in a comprehensive effort to build the next energy economy, let’s embark on that mission to “unleash American innovation and seize control of our own destiny.”

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Source: White House Press Office

Good evening. As we speak, our nation faces a multitude of challenges. At home, our top priority is to recover and rebuild from a recession that has touched the lives of nearly every American. Abroad, our brave men and women in uniform are taking the fight to al Qaeda wherever it exists. And tonight, I’ve returned from a trip to the Gulf Coast to speak with you about the battle we’re waging against an oil spill that is assaulting our shores and our citizens.

On April 20th, an explosion ripped through BP’s Deepwater Horizon drilling rig, about forty miles off the coast of Louisiana. Eleven workers lost their lives. Seventeen others were injured. And soon, nearly a mile beneath the surface of the ocean, oil began spewing into the water.

Because there has never been a leak of this size at this depth, stopping it has tested the limits of human technology. That is why just after the rig sank, I assembled a team of our nation’s best scientists and engineers to tackle this challenge – a team led by Dr. Steven Chu, a Nobel Prize-winning physicist and our nation’s Secretary of Energy. Scientists at our national labs and experts from academia and other oil companies have also provided ideas and advice.

As a result of these efforts, we have directed BP to mobilize additional equipment and technology. In the coming days and weeks, these efforts should capture up to 90% of the oil leaking out of the well. This is until the company finishes drilling a relief well later in the summer that is expected to stop the leak completely.

Already, this oil spill is the worst environmental disaster America has ever faced. And unlike an earthquake or a hurricane, it is not a single event that does its damage in a matter of minutes or days. The millions of gallons of oil that have spilled into the Gulf of Mexico are more like an epidemic, one that we will be fighting for months and even years.

But make no mistake: we will fight this spill with everything we’ve got for as long it takes. We will make BP pay for the damage their company has caused. And we will do whatever’s necessary to help the Gulf Coast and its people recover from this tragedy.

Tonight I’d like to lay out for you what our battle plan is going forward: what we’re doing to clean up the oil, what we’re doing to help our neighbors in the Gulf, and what we’re doing to make sure that a catastrophe like this never happens again.

First, the cleanup. From the very beginning of this crisis, the federal government has been in charge of the largest environmental cleanup effort in our nation’s history – an effort led by Admiral Thad Allen, who has almost forty years of experience responding to disasters. We now have nearly 30,000 personnel who are working across four states to contain and cleanup the oil. Thousands of ships and other vessels are responding in the Gulf. And I have authorized the deployment of over 17,000 National Guard members along the coast. These servicemen and women are ready to help stop the oil from coming ashore, clean beaches, train response workers, or even help with processing claims – and I urge the governors in the affected states to activate these troops as soon as possible.

Because of our efforts, millions of gallons of oil have already been removed from the water through burning, skimming, and other collection methods. Over five and a half million feet of boom has been laid across the water to block and absorb the approaching oil. We have approved the construction of new barrier islands in Louisiana to try and stop the oil before it reaches the shore, and we are working with Alabama, Mississippi, and Florida to implement creative approaches to their unique coastlines.

As the clean up continues, we will offer whatever additional resources and assistance our coastal states may need. Now, a mobilization of this speed and magnitude will never be perfect, and new challenges will always arise. I saw and heard evidence of that during this trip. So if something isn’t working, we want to hear about it. If there are problems in the operation, we will fix them.

But we have to recognize that despite our best efforts, oil has already caused damage to our coastline and its wildlife. And sadly, no matter how effective our response becomes, there will be more oil and more damage before this siege is done. That’s why the second thing we’re focused on is the recovery and restoration of the Gulf Coast.

You know, for generations, men and women who call this region home have made their living from the water. That living is now in jeopardy. I’ve talked to shrimpers and fishermen who don’t know how they’re going to support their families this year. I’ve seen empty docks and restaurants with fewer customers – even in areas where the beaches are not yet affected. I’ve talked to owners of shops and hotels who wonder when the tourists will start to come back. The sadness and anger they feel is not just about the money they’ve lost. It’s about a wrenching anxiety that their way of life may be lost.

I refuse to let that happen. Tomorrow, I will meet with the chairman of BP and inform him that he is to set aside whatever resources are required to compensate the workers and business owners who have been harmed as a result of his company’s recklessness. And this fund will not be controlled by BP. In order to ensure that all legitimate claims are paid out in a fair and timely manner, the account must and will be administered by an independent, third party.

Beyond compensating the people of the Gulf in the short-term, it’s also clear we need a long-term plan to restore the unique beauty and bounty of this region. The oil spill represents just the latest blow to a place that has already suffered multiple economic disasters and decades of environmental degradation that has led to disappearing wetlands and habitats. And the region still hasn’t recovered from Hurricanes Katrina and Rita. That’s why we must make a commitment to the Gulf Coast that goes beyond responding to the crisis of the moment.

I make that commitment tonight. Earlier, I asked Ray Mabus, the Secretary of the Navy, a former governor of Mississippi, and a son of the Gulf, to develop a long-term Gulf Coast Restoration Plan as soon as possible. The plan will be designed by states, local communities, tribes, fishermen, businesses, conservationists, and other Gulf residents. And BP will pay for the impact this spill has had on the region.

The third part of our response plan is the steps we’re taking to ensure that a disaster like this does not happen again. A few months ago, I approved a proposal to consider new, limited offshore drilling under the assurance that it would be absolutely safe – that the proper technology would be in place and the necessary precautions would be taken.

That was obviously not the case on the Deepwater Horizon rig, and I want to know why. The American people deserve to know why. The families I met with last week who lost their loved ones in the explosion – these families deserve to know why. And so I have established a National Commission to understand the causes of this disaster and offer recommendations on what additional safety and environmental standards we need to put in place. Already, I have issued a six-month moratorium on deepwater drilling. I know this creates difficulty for the people who work on these rigs, but for the sake of their safety, and for the sake of the entire region, we need to know the facts before we allow deepwater drilling to continue. And while I urge the Commission to complete its work as quickly as possible, I expect them to do that work thoroughly and impartially.

One place we have already begun to take action is at the agency in charge of regulating drilling and issuing permits, known as the Minerals Management Service. Over the last decade, this agency has become emblematic of a failed philosophy that views all regulation with hostility – a philosophy that says corporations should be allowed to play by their own rules and police themselves. At this agency, industry insiders were put in charge of industry oversight. Oil companies showered regulators with gifts and favors, and were essentially allowed to conduct their own safety inspections and write their own regulations.

When Ken Salazar became my Secretary of the Interior, one of his very first acts was to clean up the worst of the corruption at this agency. But it’s now clear that the problems there ran much deeper, and the pace of reform was just too slow. And so Secretary Salazar and I are bringing in new leadership at the agency – Michael Bromwich, who was a tough federal prosecutor and Inspector General. His charge over the next few months is to build an organization that acts as the oil industry’s watchdog – not its partner.

One of the lessons we’ve learned from this spill is that we need better regulations better safety standards, and better enforcement when it comes to offshore drilling. But a larger lesson is that no matter how much we improve our regulation of the industry, drilling for oil these days entails greater risk. After all, oil is a finite resource. We consume more than 20% of the world’s oil, but have less than 2% of the world’s oil reserves. And that’s part of the reason oil companies are drilling a mile beneath the surface of the ocean – because we’re running out of places to drill on land and in shallow water.

For decades, we have known the days of cheap and easily accessible oil were numbered. For decades, we have talked and talked about the need to end America’s century-long addiction to fossil fuels. And for decades, we have failed to act with the sense of urgency that this challenge requires. Time and again, the path forward has been blocked – not only by oil industry lobbyists, but also by a lack of political courage and candor.

The consequences of our inaction are now in plain sight. Countries like China are investing in clean energy jobs and industries that should be here in America. Each day, we send nearly $1 billion of our wealth to foreign countries for their oil. And today, as we look to the Gulf, we see an entire way of life being threatened by a menacing cloud of black crude.

We cannot consign our children to this future. The tragedy unfolding on our coast is the most painful and powerful reminder yet that the time to embrace a clean energy future is now. Now is the moment for this generation to embark on a national mission to unleash American innovation and seize control of our own destiny.

This is not some distant vision for America. The transition away from fossil fuels will take some time, but over the last year and a half, we have already taken unprecedented action to jumpstart the clean energy industry. As we speak, old factories are reopening to produce wind turbines, people are going back to work installing energy-efficient windows, and small businesses are making solar panels. Consumers are buying more efficient cars and trucks, and families are making their homes more energy-efficient. Scientists and researchers are discovering clean energy technologies that will someday lead to entire new industries.

Each of us has a part to play in a new future that will benefit all of us. As we recover from this recession, the transition to clean energy has the potential to grow our economy and create millions of good, middle-class jobs – but only if we accelerate that transition. Only if we seize the moment. And only if we rally together and act as one nation – workers and entrepreneurs; scientists and citizens; the public and private sectors.

When I was a candidate for this office, I laid out a set of principles that would move our country towards energy independence. Last year, the House of Representatives acted on these principles by passing a strong and comprehensive energy and climate bill – a bill that finally makes clean energy the profitable kind of energy for America’s businesses.

Now, there are costs associated with this transition. And some believe we can’t afford those costs right now. I say we can’t afford not to change how we produce and use energy – because the long-term costs to our economy, our national security, and our environment are far greater.

So I am happy to look at other ideas and approaches from either party – as long they seriously tackle our addiction to fossil fuels. Some have suggested raising efficiency standards in our buildings like we did in our cars and trucks. Some believe we should set standards to ensure that more of our electricity comes from wind and solar power. Others wonder why the energy industry only spends a fraction of what the high-tech industry does on research and development – and want to rapidly boost our investments in such research and development.

All of these approaches have merit, and deserve a fear hearing in the months ahead. But the one approach I will not accept is inaction. The one answer I will not settle for is the idea that this challenge is too big and too difficult to meet. You see, the same thing was said about our ability to produce enough planes and tanks in World War II. The same thing was said about our ability to harness the science and technology to land a man safely on the surface of the moon. And yet, time and again, we have refused to settle for the paltry limits of conventional wisdom. Instead, what has defined us as a nation since our founding is our capacity to shape our destiny – our determination to fight for the America we want for our children. Even if we’re unsure exactly what that looks like. Even if we don’t yet know precisely how to get there. We know we’ll get there.

It is a faith in the future that sustains us as a people. It is that same faith that sustains our neighbors in the Gulf right now.

Each year, at the beginning of shrimping season, the region’s fishermen take part in a tradition that was brought to America long ago by fishing immigrants from Europe. It’s called “The Blessing of the Fleet,” and today it’s a celebration where clergy from different religions gather to say a prayer for the safety and success of the men and women who will soon head out to sea – some for weeks at a time.

The ceremony goes on in good times and in bad. It took place after Katrina, and it took place a few weeks ago – at the beginning of the most difficult season these fishermen have ever faced.

And still, they came and they prayed. For as a priest and former fisherman once said of the tradition, “The blessing is not that God has promised to remove all obstacles and dangers. The blessing is that He is with us always,” a blessing that’s granted “…even in the midst of the storm.”

The oil spill is not the last crisis America will face. This nation has known hard times before and we will surely know them again. What sees us through – what has always seen us through – is our strength, our resilience, and our unyielding faith that something better awaits us if we summon the courage to reach for it. Tonight, we pray for that courage. We pray for the people of the Gulf. And we pray that a hand may guide us through the storm towards a brighter day. Thank you, God Bless You, and may God Bless the United States of America.

from Countdown with Keith Olbermann

Visit msnbc.com for breaking news, world news, and news about the economy

Finance, Markets, Economy

• Markets Pricing in ‘Paradigm Change’ – El-Arian – CNBC
• Best Buy profits don’t meet target - CNBC
• Data and BP top market agenda - MarketWatch

Other Stuff

• Efforts to control gulf spill described as ‘chaotic’ - New York Times
• Setbacks cloud U.S. plan to exit Afghanistan – New York Times
• Banks Yielding on Volcker, Picking Other Fights – New York Times
• Kasich’s tax returns flip flop - Columbus Dispatch
• Editorial: Your tax dollars at work - Columbus Dispatch
• U.S. man arrested in Pakistan for Hunting bin-Laden – Agence France Presse
• More Alvin Greene - Washington Post

Click the map to go to the New York Times site and use the oil spill tracker.

As usual, the New York Times’ interactive maps rule.  You can visit the Times’ oil spill tracking map here.  Check out the “play” feature at the upper left portion of the map to see the oil spill grow and move over time.

There are also tabs at the top of the map to change the data shown.  For instance, you can see a plot of the effects of the spill on wildlife.

• Op-Ed, Thomas Suddes: Pandering in Ohio is a Two Party Business – The Plain Dealer
• Editorial: What Price are Cafaros Paying? – The Vindicator
  
• Kasich and His ‘Bible Guys’ – Columbus Dispatch
• Op-Ed, Brent Larkin: Close Races Brewing in Ohio – The Plain Dealer
• Editorial: Ohio Senate Vacation Extends Foreclosure Follies – The Plain Dealer
  
• NRA Working Ohio Legislature – Columbus Dispatch
  
• ODOT Looks for Future Funding of Rest Areas – The Plain Dealer
  
• Op-Ed, Joe Hallett: Redistricting Reform Falls Prey to Dreams of Power – Columbus Dispatch
• Op-Ed, Jonathan Riskind: Election Surprises Loom in November – Columbus Dispatch
• Editorial: Dollar by Dollar – Akron Beacon Journal
• Editorial: Dollar by Dollar (Part II) – Akron Beacon Journal
  
• Editorial: Ohio Late but on Right Testing Track – Dayton Daily News
• Tobacco Lobbyist Biggest Boehner Donor – Columbus Dispatch
• Kilroy on FinReg Conference Committee – Columbus Dispatch
• Brown, Voinovich Work to Fund Nuclear Cleanup – Columbus Dispatch

Selected News

• Increasing Number of Mahoning Valley Families Face Foreclosure – The Vindicator
• Sex Offender Registration Force Some Underground – The Plain Dealer
• Do Sex-Offender Laws Make Us Safer? – The Plain Dealer
• 17.5% of Ohioans Underemployed – Dayton Daily News
• Dayton-Cincy Corridor Important to U.S. Exports – Dayton Daily News
• Commercial Properties Selling at Deep Discounts – Dayton Daily News
• Op-Ed, Michael Douglas: An Energy Revolution for the Great Lakes – Akron Beacon Journal
  

It’s totally reasonable and inevitable that the share price of BP would suffer mercilessly from the company’s gargantuan liability in the Gulf of Mexico.  Earlier this week I created the following chart of BP’s daily closing share price for it’s U.S.-listed shares.

When Interior Secretary Ken Salazar opined publicly that the company ought to be responsible for all unemployment claims related to the federal government’s six month moratorium on offshore Gulf drilling, BP’s stock took an especially nasty dive to a 14-year low on Wednesday.  I hope that the Obama Administration’s efforts to turn public opinion back in the president’s favor on this mess don’t backfire and kill what this country needs to be the proverbial “Golden Goose” for the next several years.  A heavily-regulated and monitored BP – in a strong financial position – is the company that will be able to afford the tens of billions of dollars needed to make the people and environment of the Gulf Coast whole.

As an Obama supporter and Obama voter I am equally elated and dismayed.  In the case of energy policy, I’m elated we have a President who seems to be finally making the connection between our dependence on oil – foreign and otherwise – and environmental and national security issues.  I’m dismayed by Obama’s refusal to honor public interest groups’ requests to know what coal companies are lobbying the White House on “clean coal” initiatives.  The jury is out on the feasibility of clean coal technology and its practicality.  As an Ohioan I want to support the coal industry.  As an American concerned about pollution, greenhouse gases and the affordability of electricity I want to know more about where the federal government intends to invest clean coal funding and what to expect as a return on investment.  As a cynic, I want to know what big spenders – be they coal companies or the Sierra Club – are attempting to game the political system.