Obama wants escrow account for BP pay-off

Heavy oil flows through the current in Barataria Bay near Grand Isle, La.

by Stephen Beard

The Obama Administration wants BP to deposit money into an escrow account to pay off the businesses who've lost out over the past month due to the oil leak in the Gulf of Mexico.

The escrow account will be administered by an indepedent third party. If courts rule against BP, businesses affected could be sure of getting cash. Specific amounts the White House has in mind have yet to be reported and BP would not comment to Marketplace.

other demands from administartion. obama said to BP it couldnt pay dividend to shareholders?

Meanwhile, BP continues to be torn about the Obama Administration's demand that the company not pay dividends to shareholders. Executives are divided between the importance of a political gesture that would appease the angry American public and caving to pressure. "The difficulty is that is there an element of feeding the beast," says Jason Kenney of ING Bank, "and if you yield to the U.S. pressure, essentially the U.S. could come back and ask for more in the future. Kenney believes the ultimate total cost to BP will be between $6 billion and $7 billion. Other analyst estimates rise to about $40 billion.

President Obama will deliver his first oval office speech tomorrow on the BP oil leak. Meanwhile, BP's board of directors will meet today to discuss the White House's recent demands.

About the author

Stephen Beard is the European bureau chief and provides daily coverage of Europe’s business and economic developments for the entire Marketplace portfolio.

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