BP Plc said Monday it has made an initial deposit of $3 billion into a $20 billion fund to pay for its Gulf of Mexico oil spill after the oil company finalized negotiations with the U.S. Justice Department.
BP said in June it would establish the fund to compensate victims of the oil spill, the world's worst offshore leak, under intense pressure from President Barack Obama.
"We have made clear that the company still needs to ensure that the necessary funds will be available if something happens to the subsidiary that established the trust and we look forward to completion of an appropriate security arrangement in the near future," Associate Attorney General Tom Perrelli said in a statement.
BP's Macondo well ruptured on April 20, causing an explosion that sunk the rig drilling the well and killed 11 workers. While the well is now plugged with cement, the crude oil that spilled into the Gulf has put fishermen out of work and hurt tourism along the coast during the key summer season.
BP said it will put an additional $2 billion into the account in the fourth quarter of 2010. After that, $1.5 billion will be deposited per quarter until a total of $20 billion is reached, the British oil company said.
BP has suspended its dividend and is selling $30 billion in oil and gas assets around the world to help pay for claims related to the spill.
Kenneth Feinberg will administer the fund's claims, while former federal Judge John Martin and Kent Syverud, dean of the Washington University School of Law, have been named as independent trustees of the account, BP said.
Citigroup Inc will serve as the corporate trustee and paying agent for the account, BP said.
BP's shares traded on the New York Stock Exchange rose 7 cents to $41.40. (Additional reporting by James Vicini in Washington, Editing by Vicki Allen)