BP Oil Spill Update: Congress and Payment

It's been a while since we've posted an entry related to the Gulf of Mexico oil spill. Between President Obama's BP address and Congressional hearings with Tony Hayward, CEO of BP, it's hard not to know what's going on unless you never turn on the TV or see news on the Internet. Here are the latest BP oil spill highlights.

President Obama address: In his speech, President Obama says he expects the containment of up to 90 percent of the oil spill within a few weeks. To make this happen, BP needs to triple recovery efforts. It's iffy whether this could happen. Nonetheless, Obama has convinced BP to set up a $20 billion fund for spill victims and suspend stockholder dividend payments.

That $20 billion, however, may not be enough. What's more is that BP may struggle to pay for everything considering the oil company has a $100 million fund for oil industry workers affected by the temporary offshore drilling moratorium.

So far, the cleanup costs the company almost $2 billion. To give you an idea of the company's earnings, BP had a first quarter net profit over $5.6 billion at the end of March. It also had about $6 billion in cash. Remember, the company had a $7 billion deal with Devon Energy in acquiring assets in Azerbaijan, Brazil and the Gulf of Mexico.

BP CEO answers to Congress: BP CEO Tony Hayward apologized to Congress for the company's responsibility in the oil spill. He withstood chastising especially from Congressman Henry Waxman who said the company cut corners. Waxman also said Congress found no evidence of BP's paying attention to the dangers involved with the well. Hayward endured over an hour of criticism from lawmakers.

Spill rates: The spill could be up to an estimated 60,000 barrels a day, over 10 times more than BP's estimates. The lone tanker collected oil can only capture 18,000 barrels a day. Another tanker is on the way, but won't arrive until the middle of July.

Mortgage payments for residents near oil spill: Residents with coastal homes near the oil spill may be able to receive temporary relief for mortgage payments depending on their financial lender. People with homes affected by the oil spill need to call their servicer. Fannie May customers can suspend or lower mortgage payments. Citigroup says it will suspend foreclosure sales and filings for 90 days for Gulf properties. Freddie Mac states it will grant up to six months' delay for mortgage payments.