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Coast Guard Criticizes BP's Claims Process

Source: WSJ

Posted on 09 Jun 2010

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The U.S. government's point man on the Gulf of Mexico oil spill sharply criticized BP PLC in a letter released Wednesday, saying the company was taking too long to process compensation claims filed by people whose livelihoods have been affected by the disaster.

In a letter to BP Chief Executive Tony Hayward, Coast Guard Adm. Thad Allen said the government needed "more detail and openness from BP" to ensure it was meeting its commitment to restore the Gulf Coast.

The letter, dated June 8, comes amid complaints that BP had been slow to pay claims by residents affected by the spill. During a trip to Louisiana last week, President Barack Obama warned BP not to "nickel and dime" claimants. BP wasn't immediately available for comment.

BP has accepted responsibility for the spill, which was unleashed in April after a rig that had been drilling a well for the company, the Deepwater Horizon, blew up and sank in the Gulf. The company has pledged to honor all legitimate claims for compensation.

Adm. Allen said federal officials would meet with BP's senior claims team Wednesday and request detailed information on how quickly the company was evaluating and processing claims and calculating payment amounts.

In his letter, Adm. Allen said BP hadn't complied with government requests for additional information on how the claims process was meeting the needs of individuals and businesses affected by the spill. In particular, his team had asked for—and so far not received—access to the BP claims database in order to be able to monitor the status of individual claims.

He said at the meeting Wednesday officials wanted to discuss concerns about delays in processing large loss claims and about claims pending with no action taken. He also said his team wanted more information about BP's plan for continuing to pay monthly loss of income claims.

On June 7, BP said approximately 37,000 claims had been submitted and more than 18,000 payments made, totalling approximately $48 million. BP said it has received more than 152,000 calls into its help lines.

Meanwhile, BP Chief Operating Officer Doug Suttles insisted that no massive underwater oil plumes in "large concentrations" have been detected from the spill. Mr. Suttles' comments came Wednesday morning on network news shows, a day after the government said water tests confirmed underwater oil plumes from the oil spill, but that concentrations are "very low."

Mr. Suttles told NBC's "Today" show that it "may be down to how you define what a plume is here."

NOAA Administrator Jane Lubchenco said Tuesday that the tests conducted at three sites by a University of South Florida research vessel confirmed oil as far as 3,300 feet below the surface 42 miles northeast of the well site.