Overseer of BP fund gets his hands dirty

In June, President Obama tapped lawyer Kenneth R. Feinberg, 64, to oversee the $20 billion account funded by BP to compensate victims of the Gulf Coast oil spill, making him the nation's most famous mediator.

Every week, Feinberg leaves his Pennsylvania Avenue office, where the walls are adorned with dozens of pictures and news articles chronicling his work, to spend time with fishermen and others who make their living off the coastal waters.

In a recent interview with The Washington Post, the Brockton, Mass., native, who also oversaw the government's Sept. 11 Victim Compensation Fund, talked about the task ahead as he wraps up emergency claim payments and moves on to making final payments to victims. Excerpts follow:

Have you met one-on-one with people who were affected by the spill?

I've sat down personally with hundreds of people. I've had town hall meetings throughout the gulf with thousands of people. You can't do this from Washington. You have to go down there, and that's what I've been doing.

Why have the claims skyrocketed in the past two weeks?

People are getting paid. The payments are generous. People are saying, "Let's file a claim; we might get paid too." We don't know yet how many of them are legitimate.

What problems are you experiencing with processing emergency claims?

There are 25,000 claims with absolutely no documentation. Thousands of them say things like, "My neighbor got paid; pay me too." Or they say, "I fish off the gulf to eat. Send me grocery money." There are 50,000 of them with woefully inadequate documentation.

What was wrong with the BP claim centers? Why did they need to be replaced by your operation?

The BP claim centers served their purpose. It was an emergency bandage approach. Sometimes it went to the right people; sometime it went to the wrong people. I know of situations where they paid people who were in desperate straits. I've seen in many cases BP paid claimants and the payments appear to be fraudulent.

When it comes to final payments, you are counseling people to take the money. Some are suspicious of whether you are looking out for their best interests, since BP is paying your firm [Feinberg Rozen LLP] $850,000 a month to run the program. What do you say?

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Afghan government awards oil contract in first phase of revenue-generation plan

KABUL - The Afghan government on Monday awarded a small but potentially path-breaking crude oil contract, marking the first phase of an effort that U.S. and Afghan officials say could bring the cash-strapped government significant revenue.

The six-month deal for crude from the Angot field in Sar-i-Pol province in Afghanistan's north was designed as a confidence-building venture for one of the world's least-attractive foreign-investment markets.

If successful, Afghan and U.S. officials hope the deal will put Afghanistan on the hydrocarbon industry map and attract direly needed private investment to this landlocked country, which is kept solvent by international donors.

"This is just the beginning," Afghanistan's Minister of Mines Waheedullah Shahrani said in an interview. "But the potential is great."

Angot is among a handful of developed fields in the Amu Darya Basin, which straddles Afghanistan and Turkmenistan. The Afghan side of the basin has an estimated 80 million barrels of proven crude reserves, according to the U.S. Geological Survey. The nearby Afghan-Tajik Basin could hold as much as 1.5 billion barrels worth of crude, according to a study the agency commissioned in 2006. Together, the two areas have the potential to generate hundreds of millions of dollars per year in government revenue over the next two decades, U.S. officials estimate.

If the Afghan government manages to attract energy companies to develop its oil sector over the next few years, the country could meet its own fuel needs and perhaps export oil sometime in the next decade, U.S. officials said.

"This step means that Afghanistan is now an oil-producing nation, creating jobs for Afghans and an environment that will enable future investment in developing the oil sector," said U.S. Deputy Under Secretary of Defense Paul A. Brinkley, who oversees the Pentagon's business stabilization efforts in Iraq and Afghanistan.

Brinkley's office has invested nearly $1.5 million dollars in devising the strategy to revive Afghanistan's oil sector, which has been paralyzed for decades because of war and poor governance.

American officials acknowledge the challenges are huge. The country remains mired in a nearly decade-long war. Its entrenched culture of corruption has long dissuaded foreign investors. Its politics remain volatile. And its regulatory and legal sectors are arbitrary and vulnerable to cronyism.

"There's huge room for error," said a senior American official involved in the effort who spoke candidly on the condition of anonymity. "The whole thing could fall flat on its face."

Ben Lando, who runs the Iraq Oil Report and has studied emerging oil markets, said, too, that oil wealth can be destabilizing in the short term.

"There's a good chance Afghanistan could be stricken by the resource curse rather than come to use its oil for the benefit of its citizens," Lando said. "Oil wealth has a history of having a deteriorating effect on unstable governments with underdeveloped institutions and institutionalized corruption."

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BP lawyers say Gulf of Mexico oil spill size is overestimated by government

BP lawyers have said that government estimates of the size of the Gulf of Mexico oil spill are too big, perhaps by as much as 20 to 50 percent, signaling a dispute that will determine how many billions of dollars of fines BP will have to pay under the Clean Water Act.

The BP attorneys made their comments in an Oct. 21 meeting with staff members of the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, Priya Aiyar, one of the commission lawyers, revealed at a hearing Friday.

The oil giant, in a paper submitted to the presidential oil spill commission, also took issue with one of its draft reports. BP said that the assertion that "a consensus is emerging that roughly 5 million barrels of oil were released by the Macondo well is both premature and inaccurate."

BP said that the estimates by the Energy Department and an inter-agency group "appear biased toward the maximum amount of oil that could have been discharged, rather than the amount of oil most likely to have been discharged."

Penalties for spilling oil start at $1,100 a barrel and can rise to $4,300 if negligence is proved.

Rep. Edward J. Markey (D-Mass.), a sharp critic of the company, said in a letter Friday to BP chief executive Bob Dudley that "BP's new claim that the spill is much smaller than previously thought flies in the face of multiple lines of evidence, and raises questions whether this is a scientific finding, or a litigious position."

The oil company said that government and other academic experts did not properly take into account factors such as temperature differences, the amount of natural gas mixed in, and partial blockages from bent pipes, partial closure of the blowout preventer and from debris.

The company said that the flow rate had increased over time as impediments to the oil were cut away or eroded by the tremendous force of the oil and gas.

BP said that it was still too soon to reach a final conclusion about how much oil leaked from the Macondo well after a blowout sank the Deepwater Horizon drilling rig, killing 11 people. While the government's group left a margin of error of 10 percent, BP said it "believes the range of uncertainty is substantially greater."

The government has estimated that 62,000 barrels a day initially gushed from the Macondo well after the blowout, later dropping to 53,000 barrels as the reservoir was depleted. But the flow rate has been a subject of dispute from the early days of the spill, when the government estimated that 5,000 barrels a day were leaking into the gulf. Later, BP was collecting 25,000 barrels a day, and oil was still gushing into the gulf.

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