OIL COMPANY BP says it has so far spent $2.35 billion (€ 1.89 billion) on the response effort to its Gulf of Mexico oil spill.

The London-based company said the sum included $126 million paid out in claims to those affected by the disaster.

Progress on the relief well, intended to kill the leaking well, and measures to improve capture of oil from the leaking well were on track, BP said.

The company set up a $20 billion fund under pressure from the White House as public anger runs high over the undersea leak that began at a BP deepwater well in April and continues to spew oil into the Gulf, damaging tourism, fisheries and fragile ecosystems.

Lawyers involved in litigation over the disaster say the fund should be used only to compensate victims, adding that they are shocked that the fund is also for other purposes that could include massive clean-up costs and litigation.

The money can be used for a variety of purposes, but compensation is central, says Michael Rozen, a partner in the Feinberg Rozen law firm charged with administering the fund.

Kenneth Feinberg, the firm’s founder, was named by the White House to oversee the process. To focus on the spill fund, Mr Feinberg will step down from his role as the US treasury’s “pay czar” this summer.

The White House and Mr Feinberg have said the $20 billion does not necessarily represent the ceiling of what BP could be asked to pay.

“My present understanding is . . . that it is available for all manner of costs,” Mr Rozen said, stressing that all legitimate claimants would be paid. “Twenty billion maybe isn’t sufficient for the mass of stuff that’s aired, in which case BP will have to add more.

“If that should be the case, people still have their rights and remedies under law.”

The British energy giant faced the costs of compensation, spill clean-up, lawsuits and setting up the fund after a verbal agreement that was now being put in writing, Mr Rozen said.

Meanwhile, the US government is reviewing BP’s Alaska drilling plans after a report that the company’s project did not receive proper environmental oversight.

“We are looking into the issue right now,” US interior secretary Ken Salazar told a Senate energy and natural resources committee hearing when asked about reports on BP’s Liberty project in the Beaufort Sea. – (Reuters, Bloomberg)