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BP Edges Closer to Setting Up $20 Billion Fund

A Justice Department official says negotiations with BP have been completed to ensure that the oil company follows through on a commitment to establish a $20 billion compensation fund for victims of the Gulf oil spill.

Al Gros looks listens to Kenneth Feinberg, administrator of the Gulf Coast Claims Facility, speak at a town hall meeting about the $20 billion fund set up to pay damage claims from the BP oil spill July 15, 2010 in Lafitte, Louisiana.
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Al Gros looks listens to Kenneth Feinberg, administrator of the Gulf Coast Claims Facility, speak at a town hall meeting about the $20 billion fund set up to pay damage claims from the BP oil spill July 15, 2010 in Lafitte, Louisiana.

The official calls the conclusion of negotiations an important step forward for BP to honor the promises it made regarding the fund.

Speaking on condition of anonymity about the arrangements that will be announced later Monday, the official says the Obama administration looks forward to completing a security agreement with BP so that all necessary funds will be there.

The security agreement is necessary in case something were to happen to a company subsidiary that established the trust.

Drilling Resumes for Relief Well

Meanwhile, the government's point man on the Gulf oil spill says BP has resumed drilling a relief well meant to intersect the blown-out well and seal it for good.

Retired Coast Guard Adm. Thad Allen said Monday that cement forced down from the top of the crippled well last week has hardened enough that workers could begin drilling the final 100 feet of the relief well.

Engineers were drilling 20 or 30 feet at a time, then pausing to make sure they were still on the correct course to hit the broken well. It could be the end of the week before the wells intersect.

The relief well will be used to pump more cement and mud into the busted wellto permanently seal the source of the oil that spilled into the Gulf for nearly three months.

Federal officials have long said the relief well is the final step to ending the oil leak, which spewed an estimated 207 million gallons of crude into the Gulf of Mexico since the Deepwater Horizon oil rig exploded and sank in late April.

Work on the well, which is 18,000 feet below the surface of the ocean, started less than two weeks after the rig sank.

Crews will need to dig about 100 feet down and about 4 feet to the side to intersect the capped well, and the work will be done carefully and in stages.

Once the wells have met, crews will pump more mud and cement into the crippled well as part of a "bottom kill" meant to permanently seal the well.

Experts warn getting two shafts to intersect at the same point so far below ground is tough, and BP said it may take more than one attempt to make the wells meet.