- Associated Press - Monday, June 21, 2010

ON THE GULF OF MEXICO (AP) — BP has spent $2 billion in two months of fighting its Gulf of Mexico oil spill and compensating victims, with no end in sight to the disaster or the price tag.

The British oil giant released its latest tally of response costs Monday, including $105 million paid out so far to 32,000 claimants.

The figure does not include a $20 billion fund that BP PLC last week agreed to set up to continue compensating Gulf residents and businesses. There are also scores of lawsuits piling up against BP for the April 20 rig explosion that killed 11 workers and ensuing oil spill that has yet to be capped.

Also Monday, the man President Obama picked to run the $20 billion damage fund said many people are in “desperate financial straits” and need immediate relief.

“Do not underestimate the emotionalism and the frustration and the anger of people in the Gulf uncertain of their financial future,” Kenneth Feinberg told interviewers. “It’s very pronounced. I witnessed it firsthand last week.”

Mr. Feinberg, who ran the victims claim fund set up in the wake of the Sept. 11, 2001, terrorist attacks, said he is determined to speed up payment of claims.

Shares of BP, which have lost about half their value since the rig Deepwater Horizon burned and sank off the Louisiana coast, were down nearly 5 percent Monday in London trading at $5.06. The rig was owned by Transocean Ltd. but run by BP.

BP also argued that its partners in the oil well project must share responsibility for the disaster costs. BP owned 65 percent of the well, while Anadarko Petroleum Corp. had 25 percent stake and a subsidiary of Mitsui & Co. Ltd. of Japan had a 10 percent stake.

Anadarko said Friday the joint operating agreement made BP responsible for any damage because of gross negligence or willful misconduct. BP shot back Monday that all the partners shared in liability for oil spill damages.

The best hope of ending the diasaster rests on teams drilling two relief wells meant to stop the seafloor oil gusher, a daunting task: Their drills have to hit a target roughly the size of a salad plate about three miles below the water’s surface.

If the workers aboard Transocean’s Development Driller II or its sister rig, DDIII, miss or move too slowly, oil will keep pouring into the sea. As much as 125 million gallons of oil has gushed into the Gulf.

No one on the rig has done this before because these deep sea interventions are so rare, but rig workers brushed off worries and the pressure to succeed.

“It’s really not a tough thing to do,” says Mickey Fruge, the wellsite leader aboard the DDII for BP, which was leasing the rig that blew up and is responsible for stopping the oil.

The relief wells slowly are grinding their drill bits 13,000 feet below the seafloor until they intersect the damaged well left by the Deepwater Horizon. A group of reporters that included the Associated Press had a rare chance to tour the rig Saturday.

Reporters flew by helicopter above the patchy wetlands along the Mississippi River Delta and past the floating boom and skimmers that have failed to protect the Gulf Coast.

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