Gulf oil spill: BP agrees to $20 billion spill fund

Gulf oil spill: BP agrees to $20 billion spill fund - The deal gave Obama his most tangible success since the crisis began 58 days ago and came after weeks of criticism of his handling of the disaster.

BP and its promises to stem the oil are firmly in "the boy who cried wolf" territory. Yet Mr. Obama, in one of the most important speeches of his presidency, pinned no small amount of his credibility in the crisis on a plan that BP itself is trying to downplay.

Under the agreement, BP committed to pay $20 billion into an independently managed fund over four years, suspend dividend payments for the rest of the year and pay $100 million to workers idled by the six-month moratorium on deep-sea drilling that the Obama administration imposed after the spill.

The $20 billion figure is roughly equal to BP's average annual profits over the past four years. BP is expected to report net profits of $18.9 billion in 2010, according to Thomson Reuters I/B/E/S consensus estimates.

The president's statement came only a few days after BP had to backtrack on executive Doug Suttles's comment that the flow at the Macondo well would close to "a trickle" soon. Moreover, they've had to defend early decisions not to calculate the flow rate accurately – saying it wasn't important.