Future Gulf Drilling to Fund Gulf Cleanup

So much for lawmakers who want the company out of the Gulf for good
By Kevin Spak,  Newser Staff
Posted Aug 10, 2010 7:20 AM CDT
Updated Aug 10, 2010 8:10 AM CDT
Future Gulf Profits to Back Cleanup Fund
Oil containment boom is laid out in Treasure Pass, in waters near Yscloskey, La. Saturday, July 31, 2010.   (AP Photo/Judi Bottoni)

BP has almost reached a deal with the Obama administration to use its Gulf of Mexico profits to guarantee its $20 billion cleanup fund, the Wall Street Journal reports. BP has already paid $3 billion into the fund, which is designed to compensate coastal residents and businesses hurt by the Deepwater Horizon spill, so the talks are over how it’ll guarantee the remaining $17 billion.

Originally, the sides discussed using BP’s oil fields to guarantee the fund, but the government didn’t want to wind up owning them. The new proposal would instead use the firm’s oil revenue as collateral, but it carries political risks because it makes the government a kind of partner in developing BP’s Gulf oil operation. Congress might object to such a deal; it’s considering banning BP from operating in the Gulf at all. (More British Petroleum stories.)

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