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BP, UK based Oil Company is aiming to cut of payments planned keeping in mind future losses occurring due to the fatal Macondo disaster. The company had earlier announced a $20 million compensation fund for victims of the April 20, 2010, Deepwater Horizon oil spill. However, now the company feels that the payments are more than previously thought, in recovery of Gulf Oil Spill disaster. It’s been 15 months since the BP-operated Macondo drilling rig in the Gulf of Mexico blew spilling nearly 53,000 barrels per day (8,400 cubic metre /d) before it was capped. The oil spill is registered as biggest-ever accidental oil spill killing 11 men on the platform and injuring 17 others. The oil spill was the worst environmental disaster the US has faced affecting the ecology, tourism and fisheries business in a hard way. Coincidentally the oilrig blew during peak times leading to many tourists cancelling their vacations. In addition, the Deepwater Horizon Oil Spill disaster halted new drillings thus clipping wings of the oil and gas business. BP had established the $20 million compensation fund to revive the livelihoods of victims who were and will continue to be affected by the disaster. However, in a 29-page document submitted by BP, said that it had noticed in February that was a strong confirmation that the economic recovery was in progress and it would adjust the compensation claims as appropriate. It noted that hotels along the Gulf coast previously hit by the disaster were performing above pre-spill levels, all fishing grounds had opened and it was confirmed that Gulf seafood was safe. Tourist income was also at an all-time high. BP said that it was strongly committed to paying all the justifiable claims but considering the recovery, it is necessary to evaluate as how exactly the claimants would be affected by the spill in the future. It had been observed that evidence proved recovery by the end of 2010 and performance of affected industries had positively improved into 2011. BP said that the Gulf economy was going strong and that there was no reason to believe that claimants with limited exceptions would incur future loss due to the oil spill. For that reason, the company believed that the “future loss” clause should be removed except in rare circumstances. On completion of one year of the oil spill, the company has received 800,000 claims from more than 500,000 individuals and businesses. As of July 1, 2011, the company paid compensation amounting to $4.5 billion to more than 200,000 claimants and about $430 million are being considered. The fund will operate until August 23, 2013. Recently, BP‘s oil investment in India has been approved by the Indian cabinet. BP’s investment in oil includes Reliance selling a part of its stake in its oil and gas fields to BP PLC. The company had been waiting for approval since February for its oil investments future in India when Reliance agreed to sell a 30% stake of its oil and gas blocks in India to BP. Kyles Humphrey is an experienced journalist in oil related fields, who frequently writes articles related to oil prices & indexes and crude oil including tips on investment in oil. Please visit oil.com for more details.
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