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BP Will Pay For Gulf Oil Spill Disaster, CEO Says

BP Chief Executive Tony Hayward
Enlarge John D. McHugh/AFP/Getty Images

BP Chief Executive Tony Hayward said the company has "made it clear that where legitimate claims are made, we will be good for them" when asked whether BP was prepared to pay claims to individuals who have lost livelihoods owing to the spill.

BP Chief Executive Tony Hayward
John D. McHugh/AFP/Getty Images

BP Chief Executive Tony Hayward said the company has "made it clear that where legitimate claims are made, we will be good for them" when asked whether BP was prepared to pay claims to individuals who have lost livelihoods owing to the spill.

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May 3, 2010

The CEO of petroleum giant BP told NPR on Monday that his company is fully responsible for the cleanup and any "legitimate" claims from an undersea pipeline rupture that threatens to deposit hundreds of thousands of gallons of crude on the U.S. Gulf Coast.

"It is indeed BP's responsibility to deal with this, and we are dealing with it," Tony Hayward told Morning Edition's Steve Inskeep.

"We will absolutely be paying for the cleanup operation. There is no doubt about that. It's our responsibility — we accept it fully," he added.

Hayward also said the British oil giant was "mounting a massive response" to what he described as a "tragic accident."

The Deepwater Horizon offshore drilling rig was hit by an explosion April 20 and sank two days later. More than 90 workers were rescued, but 11 are still missing and presumed dead. BP leased the rig, which lies about 50 miles off the Louisiana coast, from Houston-based Transocean.

Deepwater Horizon Disaster

April 20: Deepwater Horizon drilling rig explodes off Louisiana coast. Eleven workers missing and presumed dead.

April 22: Rig sinks.

April 23: Coast Guard Rear Adm. Mary Landry says no oil appears to be leaking from the undersea wellhead or at the water's surface.

April 24: Leak reported; oil is estimated to be leaking at the rate of 1,000 barrels a day.

April 29: Coast Guard says leak may be five times greater than earlier estimate: 5,000 barrels a day. Louisiana Gov. Bobby Jindal declares state of emergency.

May 1: Coast Guard Adm. Thad Allen is named national incident commander.

May 2: President Obama visits Coast Guard station in Venice, La.

May 3: BP CEO Tony Hayward tells NPR his company will pay for the cleanup and any "legitimate" legal claims.

The cause of the blast has not yet been determined.

When pressed on whether BP was prepared to pay claims to individuals who lose their livelihoods owing to the spill, Hayward said the company has "made it clear that where legitimate claims are made, we will be good for them."

"We have a claims process set up. There are small claims today that are being paid instantly," he said. "[For] bigger claims, we clearly have a process to run through."

Over the weekend, Alabama Attorney General Troy King said he had told BP representatives to stop circulating settlement agreements among coastal residents that reportedly offered payments of up to $5,000 in exchange for not suing the company.

Hayward called it "an early misstep" involving "a standard contract with the team we're using that was eliminated very early in the process."

President Obama has made clear that BP must shoulder the cost of the disaster. "BP is responsible for this leak. BP will be paying the bill," Obama said Sunday as he toured a Coast Guard staging area in Venice, La.

Homeland Security Secretary Janet Napolitano and Interior Secretary Ken Salazar were expected to meet later Monday with top BP executives to discuss the crisis, including how the company planned to pay for the cleanup. On Sunday, federal officials shut down fishing from the Mississippi River to the Florida Panhandle.

The Coast Guard and BP have said it's nearly impossible to know how much oil has already gushed since the rig blast. The Guard had estimated the slick to be at least 1.6 million gallons — equivalent to about 2 1/2 Olympic-sized swimming pools. Other experts say they believe far more oil has been released in a spill many fear now may eclipse the 11 million gallons released by the Exxon Valdez. Sheen from the massive slick has already reached parts of the Louisiana coastline.

Officials say it's likely that oil will continue gushing into the Gulf of Mexico for at least another week as a result of the pipeline rupture 5,000 feet below sea level. A plan to install a device to capture the oil and siphon it to a barge waiting at the surface would take that long, Hayward said.

Photos: Oil Spill In The Gulf

[Interactive:Photos: Oil Spill In The Gulf]

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Photos from the Gulf of Mexico oil spill disaster.

"We have fabricated and will have on location by next weekend a subsea containment system, with the intention of containing the leak," he said. Hayward described the device as "a dome ... that sits over the top of the wellhead and channels the oil to the surface, where it can be contained."

Such an operation, he said, had "never been done at 5,000 feet."

Eight robotic submarines were working around the clock to fix the well's blowout preventer — a "fail safe" that nonetheless was unable to prevent the spill, Hayward said, adding that the mechanism's failure was unprecedented.

"No one understands why it failed," he said.

The company is also in the process of drilling a relief well to isolate the well.

Hayward said 700 fishing vessels had been deployed to support its effort to contain the spill. "In the last 48 hours, we have trained over 3,000 people [who have] signed up on the volunteer program, so there is an enormous effort to work with the local communities," he said. "I talked with a fisherman who was on the program. He was loading his vessel with oil booms to go and deploy them."

He declined to say whether he supported a proposal by Sen. Bill Nelson (D-FL) to temporarily halt all offshore oil drilling until the exact cause of the accident is determined.

"We clearly need to understand what has happened here and that will come out with the investigation," Hayward said.

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