The administrator of the $20-billion fund created by BP Plc to compensate Gulf of Mexico oil spill victims announced plans Wednesday for processing final payments.
Administrator Kenneth Feinberg said in a news release that claimants have a choice, a lump sum final payment for which they would release BP from liability or continued emergency payments in hopes of a bigger final payment in the future.
“However, there is no guarantee that, in the future, a lump sum final payment will be as generous as it will be currently,” Feinberg said.
The announcement by the Gulf Coast Claims Facility was accompanied by a detailed protocol for handling final payments to individuals and businesses such as fishermen and coastal hotels and restaurants.
It includes an appeals process for settling disagreements between claimants and the fund.
The fund was created in the wake of the worst oil spill in U.S. history that began with a well blowout offshore of Louisiana on April 20 that killed 11 workers aboard Transocean’s Deepwater Horizon drilling rig.
The leak from BP’s Macondo well was halted in July and the well was declared permanently capped in September.
Feinberg said the fund, created in June, has paid $2 billion to 125,000 people from the $20 billion committed by BP after a meeting with President Barack Obama in June.
He told the Financial Times that he has approved fewer than half the claims filed so far and expects available funds to be adequate to cover all legitimate claims.
An estimated 4.9 million barrels of oil was spilled, shutting down fisheries and staining beaches from Louisiana to Florida.
The government estimates three-quarters was recovered or dispersed.
The fund is entirely privately operated but is intended to comply with the Oil Pollution Act of 1990 requiring responsible parties to compensate victims of spills.
(Reporting by Bruce Nichols; Editing by Derek Caney)
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