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BP ON THE BRINK AS US CLOSES IN

US PRESIDENT Barack Obama ordered BP last night to relinquish its control over the Gulf of Mexico claims response in his first address to the nation from the Oval Office.

The President reassured the American public during the televised speech that the government was in control of the crisis that has already caused severe financial and environmental damage to the Gulf communities and coastline.

“I think everyone agrees that we have to get BP out of the claims processes and, as I said, make sure that fishermen and hotel owners have a fast, efficient and transparent claims process so that they’re getting their livelihoods replaced,” said Obama’s spokesman Robert Gibbs earlier yesterday.

Obama has the legal authority to force BP out of the claims handling process if the company does not comply with his wishes.

The President is today due to meet with BP chairman Carl-Henric Svanberg to discuss moves to set up a $20bn (£13.5bn) escrow account, which will be independently managed and will pay for the clean-up.

Upon news of the demands made by Obama to set up the account, rating agency Fitch downgraded BP’s ­status to BBB from AA just 12 days after it placed the embattled oil group on “negative watch”.

“The recent claims by US state and federal authorities that BP escrow ­significant sums pre-emptively, ahead of any agreed claims process, represent a material change in approach, should it ultimately prove a legally supportable move against the com­pany,” said Fitch.

BP’s shares fell by just under four per cent yesterday on the news and closed at 342p in London. In the US, however the shares rallied to close up 73 cents at $31.40. The company’s market value has almost halved since the 20 April explosion.

Heaping further pressure on BP, rival oil companies at a US congressional hearing said yesterday that BP had not adhered to industry standards when constructing its deep-sea well. Chairman of BP America Lamar McKay was grilled by US lawmakers alongside Exxon Mobile chairman Rex Tillerson, Chevron chief executive John Watson, ConocoPhillips chairman and chief executive James Mulva, and Marvin Odum, president of Shell on drilling safety.

But House energy committee chairman Henry Waxman, said the com­pany’s response plans were near- identical, even including the phone number of an expert who had died in 2005.