BP Pledges Collateral for $20 Billion Claims Fund

Oil giant BP has pledged certain Gulf of Mexico assets as collateral for the $20 billion Deepwater Horizon Oil Spill Trust which was set up to pay legitimate claims arising from the April 20 disaster.

The pledged collateral consists of an overriding royalty interest in oil and gas production of BP’s Thunder Horse, Atlantis, Mad Dog, Great White and Mars, Ursa and Na Kika oil and gas assets in the Gulf of Mexico.

“The pledging of these assets underscores our commitments to the trust which we set up to pay all legitimate claims arising from the tragedy,” said Lamar McKay, chairman and president of BP America Inc. and BP’s Gulf Coast Restoration Organization.

Since the Macondo well was finally confirmed sealed on September 19, BP said it has been completing the process of plugging and abandoning the well. This includes removing portions of the casing and setting cement plugs.

BP has also started dismantling and recovering containment equipment and decontaminating the vessels that were in position at the wellsite.

On August 23 processing of claims from individuals and businesses related to the Deepwater Horizon incident transferred to the Gulf Coast Claims Facility (GCCF). As of Sept. 29, more than 86,000 claimants have submitted claims to the GCCF, with over 44,000 claims totalling over $806 million being paid, including a $34.5 million fund for real estate brokers and agents. Prior to the transfer to the GCCF, BP had made 127,000 claims payments, totalling approximately $399 million.