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Revenue from BP's oil and gas drilling may be used in victims' compensation fund

Drilling revenue may be used for victims' fund

The $20 billion victims' compensation fund established for the gulf oil spill may use revenue from BP's oil and gas drilling as collateral, according to details released Wednesday by the White House. The government watchdog group Public Citizen criticized the arrangement as a conflict of interest, arguing that it gives the government a financial incentive to encourage BP to keep drilling offshore. BP has already made a $3 billion initial deposit, announced Monday. The company must pay $2 billion more this year and continue in installments of $1.25 billion, according to the trust documents released Wednesday. The trust calls for a collateral fund to ensure that all the necessary money will be available if something happens to the BP subsidiary that established the trust. The trust documents say that unless a different agreement is reached, BP will agree to give the trust first priority to production payments from the company's U.S. oil and gas production as collateral.

Depression off La. coast is gone

A tropical depression that was heading for the oil spill off Louisiana's coast has dissipated. The National Hurricane Center in Miami says it weakened Wednesday afternoon instead of becoming Tropical Storm Danielle as it neared land around the mouth of the Mississippi River. A tropical storm warning was discontinued. The weather had forced a halt to drilling on a relief well intended to permanently plug the blown-out well in the gulf. Plans to resume drilling were unclear Wednesday night.

Texas official sues over drilling ban

Texas Attorney General Greg Abbott sued the Obama administration in federal court in Houston on Wednesday, claiming that the current offshore drilling moratorium is "unjustified" and that officials did not contact state officials before issuing the ban. The federal ban imposed July 12 halts all drilling operations in water greater than 500 feet.

Revenue from BP's oil and gas drilling may be used in victims' compensation fund 08/11/10 [Last modified: Wednesday, August 11, 2010 11:32pm]
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