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BP Gulf spill costs hit $2 billion

 

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ON THE GULF OF MEXICO — BP has spent $2 billion in two months of fighting its Gulf of Mexico oil spill and compensating victims, with no end in sight to the disaster or the price tag.

The Bri t ish oi l giant released it's latest tally of response costs today, including $105 million paid out so far to 32,000 claimants. The figure does not include a $20 billion fund that BP PLC last week agreed to set up to continue compensating Gulf residents and businesses. There are also scores of lawsuits piling up against BP for the April 20 rig explosion that killed 11 workers and ensuing oil spill that has yet to be capped.

Al so today, the man President Barack Obama picked to run the $20 billion damage fund said many people are in "desperate financial straits" and need immediate relief.

"Do not underestimate the emotionalism and the frustration and the anger of people in the Gulf uncertain of their financial future," Kenneth Feinberg told interviewers.

"It's very pronounced. I witnessed it firsthand last week."

Feinberg, who ran the victims claim fund set up in the wake of the Sept. 11, 2001, terrorist attacks, said he is determined to speed up payment of claims.

Shares of BP, which have lost about half their value since the rig Deepwater Horizon burned and sank off the Louisiana coast, were down near ly 5 percent Monday in London trading at $5.06. The rig was owned by Transocean Ltd. But run by BP.

BP also argued that its partners in the oil well project must share responsibility for the disaster costs. BP owned 65 percent of the well, while Anadarko Petroleum Corp. had 25 percent stake and a subsidiary of Mitsui & Co. Ltd. Of Japan had a 10 percent stake.

Anadarko said Friday the joint operating agreement made BP responsible for any damage due to gross negligence or willful misconduct.

BP shot back today that all the partners shared in liability for oil spill damages.

The best hope of ending the diasaster rests on teams drilling two relief wells meant to stop the seafloor oil gusher, a daunting task: Their drills have to hit a target roughly the size of a salad plate about three miles below the water's surface.

 
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