Obama BP Meeting: Company Agrees To $20 Billion Escrow Account For Victims

You don't understand how this is being structured.



BP isn't putting $20 billion in an escrow account today -- BP is PROMISING to put up $20 billion in portions over 4 years. Self-insurance, just like what it's done in the past. I'll explain:



While BP is the operator & principal developer of the oil field with 65% of interest. 25% is owned by Anadarko Petroleum Corporation, and 10% by MOEX Offshore 2007 (a unit of Mitsui).



Anadarko maintains insurance policies designed to provide financial protection for such events, & estimates its coverage will likely total approximately $177.5 million, less $15 million deductible. Mitsui is believed to have a $45 million owner's extra expense policy. Transocean (the drilling contractor) is believed to have $560 million of physical damage insurance & some $950 million in third party liability insurance, of which $700 million excess of $50 million is thought to cover offshore risks. Cameron (manufacturer of the blowout preventer that failed on the rig) has a $500 million liability insurance policy.



And BP's insurance coverage?



About 3 years ago, BP decided that it was being taken for a ride, overcharged for insurance, so it decided "to go bare".



And what's our government's response? "No problem. We've got to stimulate growth & jobs."



None of these corporations has insurance coverage that comes anywhere close to repairing the damage. But they don't have to because they know that our government will bail them out & pass the costs of clean-up onto the American people.
About Gulf Oil Spill
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