BP 'to fund $20bn spill payouts'

The White House meeting was the first between the president and BP

Under-fire oil firm BP is to place $20bn (£13.5bn) in a special fund to deal with compensation payouts after the Gulf oil spill, US media report.

BP executives were said to be finalising a deal at White House talks with President Obama and aides.

The meeting was held the morning after Mr Obama made his first Oval Office TV address over the oil spill.

The fund is to be run by a lawyer who oversaw compensation claims after the 9/11 attacks, reports said.

In his current role as Mr Obama's "pay tsar", Kenneth Feinberg sets salary limits for executives at firms in receipt of federal bailout funds.

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This week, the BBC is assessing the impact of the Louisiana oil spill. Correspondents in the US, the Gulf of Mexico, Brazil, Nigeria and London are reporting for the BBC World Service, World News TV and the BBC News website.

Full coverage of the oil disaster

BP's share price rose in US trading after an earlier slump as news of the funding deal emerged, the Associated Press reported.

The company has been accused of failing to follow proper procedures in the run-up to the explosion on the Deepwater Horizon rig on 20 April.

The blast led to the deaths of 11 people, caused the rig to sink and has since seen tens of millions of barrels of oil spew into the Gulf of Mexico.

Much of that is now washing ashore in states along the Gulf coast.

The fallout is affecting businesses and wildlife, as well as wiping billions of dollars off BP's value.

In its latest effort to contain the oil spewing into the Gulf of Mexico, BP announced on Wednesday morning that it had begun operating a second containment system designed to bring oil and gas to the surface for burning.

BP managed to place a cap over the leaking oil pipe earlier this month, and is now collecting some of the oil.

However, estimates of how much oil is gushing out of the well have again risen dramatically since the start of the crisis.

A government panel of scientists now believes 35,000-60,000 barrels are leaking each day, up from its estimate last week of 20,000-40,000.

You can follow the testimony of BP chief executive Tony Hayward when he appears before a US Congress committee on the BBC News website on Thursday 17 June, from 1400GMT (1000 EST).