BP agrees compensation

Barack Obama has wrung an apology from BP and an agreement for the oil company to make a $20bn down payment into a special compensation fund for victims of the Gulf oil spill today after a four-hour meeting at the White House. The payout is only the start of BP's pain. The White House was insistent that the $20bn was not a cap, and the company's chairman, Carl-Henric Svanberg, announced that BP would not be paying dividends this year. Obama said the $20bn � equivalent to two years of dividends for BP � may not be enough to honour all the economic claims against the company. "This is not a cap," Obama told reporters. "The people of the Gulf have my commitment that BP will meet its obligations to them." He said the fund would be administered by the lawyer who oversaw payments to victims of 9/11, Kenneth Feinberg. Feinberg went on to serve as Obama's 'pay tsar', setting salary limits for companies getting the most aid from a $700bn government bailout fund. The deal appeared to settle the biggest concern for residents of the Gulf: that BP, which has already spent more than $1.5bn on clean-up costs, would not make good on claims from fishermen and other businesses put out of work by the spill. Obama also extracted a commitment from BP for a $100m fund for oil rig workers put out of work by the moratorium on drilling � which the oil company had been resisting.