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BP: Payments may depend on drill permits

Sept. 2, 2010 at 11:10 PM   |   Comments

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WASHINGTON, Sept. 2 (UPI) -- A BP official says the company's ability to pay for damages from the Gulf of Mexico oil spill may be limited if it cannot get new offshore drilling permits.

In an interview with the New York Times Executive Vice President for BP America David Nagle suggested the energy giant might not be able to pay for all the fines, compensation and other costs if Congress enacts legislation preventing it from getting new permits to drill in the gulf, which accounts for 11 percent of its global production.

"If we are unable to keep those fields going, that is going to have a substantial impact on our cash flow," Nagle said.

He said that would make it "harder for us to fund things, fund these programs."

BP officials say they are not backing off from a commitment to reserve $20 billion in an escrow fund to cover damages and penalties associated with the April 20 explosion on the Deepwater Horizon oil rig that killed 11 workers and resulted in millions of barrels of oil spilling into the gulf, the Times reported Thursday.

In addition to the $20 billion, the company has said it will contribute $100 million to a foundation to benefit some workers who lost their jobs because of the Obama administration moratorium on deepwater drilling. It has also said it would give $500 million for a long-term research study on the impact of the spill.

Louisiana Gov. Bobby Jindal this week renewed his request that BP pay for a five-year, $173 million project to test and certify seafood from the gulf.

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