Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

BP puts up oil fields as collateral

By Aaron Smith, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) -- BP has put up seven of its Gulf of Mexico oil fields as collateral for the $20 billion escrow fund that it's building to pay oil spill claimants, the company said Friday.

"The pledging of these assets underscores our commitments to the trust which we set up to pay all legitimate claims arising from the tragedy," said Lamar McKay, chairman of BP America Inc. and the company's Gulf Coast Restoration Organization.

The oil and gas-producing fields being up for collateral are called Thunder Horse, Atlantis, Mad Dog, Great White, Mars, Ursa and Na Kika, according to BP.

BP spokesman David Nicholas said the revenue flow from these assets will be used as a guarantee to make sure the company is putting enough money into its escrow fund. So far, the company has put $3 billion into the fund and plans to deposit another $2 billion in fourth quarter of 2010, adding another $1.25 billion for every additional quarter through the end of 2013.

Thus far, the company has paid about $1.2 billion to claimants, said Nicholas. Claimants are mainly business owners in the Gulf region -- such as fisherman and real estate brokers - who have lost money from BP's massive oil spill, resulting from the April 20 explosion of the Deepwater Horizon rig off Louisiana that killed 11 workers.

"We continue to believe that the $20 billion escrow fund is likely to be adequate for the claims," said Nicholas, speaking from the London office of the British company.

Bob Dudley, who officially became chief executive Friday, told analysts in September that the company might not have to pay all of the $20 billion in claims.

So far, the company has spent $11.2 billion on total costs related to the spill, including clean-up and claims.

BP confirmed on Sept. 19 that the leaking well had finally been sealed.

BP's (BP) stock rose about 2% in pre-market trading. To top of page

Search for Jobs

Index Last Change % Change
Dow 18,145.71 -16.64 -0.09%
Nasdaq 5,257.40 15.57 0.30%
S&P 500 2,141.16 -0.18 -0.01%
Treasuries 1.74 -0.01 -0.40%
Data as of 7:56pm ET
Company Price Change % Change
Reynolds American In... 53.78 6.61 14.01%
Chesapeake Energy Co... 6.68 -0.23 -3.33%
AT&T Inc 37.49 -1.16 -3.00%
Microsoft Corp 59.66 2.41 4.21%
Bank of America Corp... 16.67 0.11 0.66%
Data as of Oct 21


The boards of AT&T and Time Warner are meeting on Saturday afternoon to vote on an $80 billion deal that would bring the two companies together. More

Passes for the new National Museum of African-American History and Culture in Washington D.C. are 'sold out' through March 2017. More

An American vigilante hacker -- who calls himself "The Jester" -- has hacked the Russian Ministry of Foreign Affairs in retaliation for attacks on American targets. More

The University of Illinois partnered with Coursera to launch one of the most affordable online MBA programs yet. More