Henric Svanberg and Tony HaywardPresident Barack Obama secured an agreement from BP (BP) officials Wednesday to establish a $20 billion fund to help pay losses to residents of the Gulf of Mexico as a result of the massive oil spill that began after an oil-rig explosion nearly two months ago.

The agreement was reached during a meeting with company officials Wednesday morning at the White House. Among those summoned to and present at the president's residence were BP Chairman Carl-Henric Svanberg and Chief Executive Tony Hayward.

"This discussion today was essential," Obama told reporters during a briefing following the meeting. Under current law liability, claims related to economic losses arising from an oil spill are limited to $75 million, an amount insufficient to deal with the BP oil spill. The $20 billion fund agreed to Wednesday "will provide substantial assurance the claims people and businesses have will be honored," Obama said, adding that the amount wasn't a monetary cap.

"People in the Gulf have my commitment that BP will meet its obligations to them," the president said.

$100 Million for Unemployed Rig Workers

The administration and BP mutually agreed that Kenneth Feinberg, who administered the 9/11 victims compensation fund, will head the claims process being put in place, Obama said. In addition, a three-member panel will be established to hear appeals to claims that have been turned down.

BP also agreed to establish a $100 million fund to compensate unemployed oil-rig workers affected by the stoppage of other deepwater drilling activity in the Gulf.

"BP's liabilities for this spill are significant, and they acknowledged that fact," Obama said. "We will continue to hold BP and all other responsible parties accountable." The president said he was confident that BP would be able to meet its obligations to the Gulf Coast and to the American people.

BP is a strong and viable company, the president said, "and it is in all of interests that it remain so. This is about accountability."

Bitter Timing for the Gulf Coast

Obama said his administration has directed the energy giant to contain the oil that's still spewing from the remnants of the Deepwater Horizon drilling rig that exploded on April 20, killing 11 workers. Under the mandate, BP is to mobilize additional equipment and technology that should result in the capture of up to 90% of the oil that is leaking from the broken well, the president said.

During a private moment in his meeting today with Svanberg, the president said that the oil spill, which has ravaged the Gulf of Mexico for 58 days now, couldn't have come at a worse time for the region's residents.

Having endured the devastating effects of Hurricanes Rita and Katrina in 2005 and a disabling economic recession, Gulf Coast residents were just starting to make headway once again, Obama said. The summer months provide many with their livelihoods for the whole year, whether from fishing or tourism.

"A lot of these folks don't have [a financial] cushion," Obama said, and he asked that when BP management meets with shareholders and the board of directors "to keep in mind those individuals -- that they are desperate."

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