BP kicks off $20bn spill compensation fund

BP has made its first deposit in its $20bn compensation fund, paying $3bn into an independently managed escrow account that is designed to distribute funds to those fishermen, tourist firms and other businesses that have suffered losses as a result of the Gulf of Mexico oil spill.

Bob Dudley, chief executive of BP's clean-up operations, said the payment underlined the company's commitment to providing compensation to those businesses impacted by the spill.

"Establishing this trust and making the initial deposit ahead of schedule further demonstrates our commitment to making it right in the Gulf Coast," Dudley said in a statement.

The move comes as US government officials announced that BP could permanently shutdown the ruptured well as early as this week.

The company is making good progress with its so-called "bottom kill" operation that aims to pump mud and cement through a relief well connected to the crippled Macondo well.

The relief well is now within 30 to 40 feet of the Macondo and the company is hoping to connect the two wells and begin its pumping operation within the next few days. An approaching weather system could yet delay the procedure, but officials said they were confident the work will be completed within the next few weeks, at which point the well will be permanently capped.

The news came as the National Wildlife Federation warned that despite the official view that the worst of the spill has already passed, cases of oil-affected wildlife have continued to increase. The group said that the number of oil-affected endangered sea turtles recovered since the start of the spill in April has now reached 1,000 and the rate at which they are being found has actually increased in the last few weeks.