Fifty-eight days into the crisis, BP’s humbled chairman apologized to America for the first time yesterday for the Gulf oil spill and agreed to pony up $20 billion to compensate “the small people” and other victims of the worst US environmental disaster.
Carl-Henric Svanberg made the pledge to President Obama at an extraordinary White House showdown as the leaders hammered out what Obama called “an important step towards making the people of the Gulf Coast whole again.”
Among the developments:
* Obama stressed that the $20 billion BP is putting into an independent escrow account “is not a cap” on what could be a much larger cleanup bill.
* The account will be run by Kenneth Feinberg, who earned plaudits from New Yorkers for handling the $7 billion in payments to families of victims of the 9/11 terror attacks.
* BP will also pay $100 million to support rig workers who were laid off as a result of Obama’s six-month moratorium on deepwater drilling.
* To help cover its massive obligations, BP will suspend three quarterly dividends to its millions of shareholders, as US officials demanded.
* TV ratings showed that the audience for Obama’s first Oval Office address was 32 million — a 33 percent decline from his State of the Union speech in January.
The White House meeting — featuring Obama, Vice President Joe Biden and five Cabinet secretaries — ran four hours, much longer than expected. Aides said intense negotiations over the deal began last week but were finalized only yesterday.
When he spoke afterward, Obama went out of his way to assure Americans that BP could carry out its obligations — as well as telling investors that the oil giant was sound enough to survive.
“BP is a strong and viable company, and it is in all of our interests that it remain so,” he said.
Obama also made a personal pledge.
“The people of the Gulf have my commitment that BP will meet its obligations to them,” he said.
Svanberg had said virtually nothing about the oil leak before yesterday, and even went on vacation a few days after the well blew, according to some reports. In Washington, he tried to repair his company’s image.
“I hear comments sometimes that large oil companies are — are greedy companies or don’t care, but that is not the case in BP,” he told reporters. “We care about the small people.”
He took responsibility, saying “this tragic accident should have never happened,” and told Americans: “I do thank you for the patience that you have during this difficult time.”
The sitdown in the White House’s Roosevelt Room was the first time in the crisis that Obama had been face to face with any BP executives, and it came as polls showed large majorities of Americans blame him for not being “tough enough” with the oil giant.
The meeting began with “an apology” from Svanberg, White House energy adviser Carol Browner said. “It was not something we asked for,” she added.
After the first 20-minute session, Obama met privately with Svanberg for about 25 minutes.
The president said he emphasized the personal tragedies of “desperate” Gulf shrimpers and fishermen.
After that, the two sides caucused separately several times. “There were sticking points,” Browner said. “We had to take breaks at times. There were times when each side wanted to just talk among themselves.”
Obama did not meet privately with BP CEO Tony Hayward, who has been the most visible company official for weeks — and who the president said he would have fired.
Senate Democrats proposed the $20 billion figure on Monday. Browner said the number was neither a “floor” nor “a ceiling,” and the point of yesterday’s meeting was to establish “a process” for handling claims.
Obama’s aides stressed that the escrow account did not cover billions of dollars in other expenses facing BP. A revised estimate of 60,000 barrels of oil leaking each day means BP is liable for about $250 million each day.