BP chairman Carl-Henric Svanberg today said that President Obama “is frustrated because he cares about the small people. And we care about the small people. I hear comments sometimes that large oil companies are really companies that don’t care, but that is not the case in BP, we care about the small people.”
The Swedish-born Svanberg made his comments after a more than four hour meeting between BP executives and White House officials, including President Obama.
Afterwards, both the president and Svanberg called the meeting “constructive.” President Obama told reporters that he raised two issues in the part of the meeting in which he participated, BP’s new escrow fund for those who have been economically harmed by the spill, and further efforts to cap the well. Svanberg apologized to the American people and announced the company wouldn’t be paying dividends to stockholders for the remainder of 2010.
Standing in the State Dining Room beneath a looming portrait of Abraham Lincoln, President Obama announced that BP had agreed “to set aside $20 billion to pay claims for damages resulting from this spill. This $20 billion will provide substantial assurance that the claims people and businesses have will be honored.” The $20 billion, he said, is not a cap, not a maximum amount, and it “does not supersede either individuals' rights or states' rights to present claims in court,” he said.
The escrow account will be run by Kenneth Feinberg, who served as the “Special Master” for the September 11th Victim Compensation Fund and currently serves in that same role deciding executive compensation for companies that received Troubled Asset Relief Program, or TARP funds. A three-person panel will adjudicate rejected claims.
In addition, in the wake of the president's temporary moratorium on 33 deepwater drilling projects, BP will contribute $100 million to a fund to compensate those unemployed oil rig workers.
The president said that in a private conversation he had with Svanberg, he “emphasized to him that for the families that I met with down in the Gulf, for the small-business owners, for the fishermen, for the shrimpers, this is not just a matter of dollars and cents; that a lot of these folks don't have a cushion. They were coming off Rita and Katrina, coming off the worst economy that this country's seen since the Great Depression, and this season was going to be the season where they were going to be bouncing back.”
“I emphasized to the chairman that when he's talking to shareholders, when he is in meetings in his boardroom, to keep in mind those individuals; that they are desperate; that some of them, if they don't get relief quickly, may lose businesses that have been in their families for two or three generations,” the president said. “The chairman assured me that he would keep them in mind.” Mr. Obama said the standard he would be applying “is whether or not those individuals I met with, their family members, those communities that are vulnerable, whether they are uppermost in the minds of all concerned. That's who we're doing this work for.”
With other executives such as CEO Tony Hayward and Managing Director Bob Dudley standing behind him, Svanberg came to the White House stake-out outside the West Wing and said he appreciated “the deep concern” that President Obama “feels for the people in the region” as well as “his frustration.” He said he trusted that Mr. Obama “sensed the sadness and the sorrow that we feel for this, for this tragic accident that should never have happened.”
The BP chairman announced that the BP board had decided the company would not pay any further dividends to stockholders for the remainder of 2010. He said he wanted “to take this opportunity to apologize to the American people on behalf of all the employees of BP many of whom are living on the Gulf Coast. I too thank you for the patience that you have in this difficult time. Through our actions and commitments we hope that over long-term that we will regain the trust that you have in us.”
Regarding the oil that continues to gush into the Gulf, the president repeated what he said in his first Oval Office address Tuesday night, that his administration has directed BP to mobilize additional equipment and technology, he said, which in the “coming days and weeks…should capture up to 90 percent of the oil that is leaking out of the well.”
The president said “that's not good enough, so we will continue to press BP and draw on our best minds and resources to capture the rest of the oil.”
Asked if the company took shortcuts on safety, Svanberg said the company is conducting its own “independent investigation where we will scrutinize everything that we do, to make sure that we understand the root cause of this tragic accident,” but beyond that he wouldn’t comment. After two questions, the BP executives will ushered away from the White House press corps and they ignored questions being shouted towards them, such as “how’s that ‘relative trickle’ going,” a reference to BP chief operating officer Doug Suttles’ comments to the Associated Press last week that by yesterday the gushing in the well would be reduced to a relative trickle.