In a desperate bid to stave-off a surge off public anger that has now been engulfing oil major British Petroleum for nearly two months, the company’s CEO Tony Howard today said he was “deeply sorry.”

Facing a grilling during a hearing by the Committee on Energy and Commerce of the House of Representatives, Mr. Hayward said, “I want to speak directly to the people who live and work in the Gulf region: I know that this incident has profoundly impacted lives and caused turmoil, and I deeply regret that.”

Even as the Obama administration cranked up the heat on BP, the company announced that it would commit around $20 billion to an escrow account that would be used to help mitigate the costs of cleaning up the enormous spill from the BP-run Deepwater Horizon offshore rig.

On Wednesday President Barack Obama and senior White House staff met with Mr. Hayward and top BP executives to lay out their demands regarding the escrow account and the costs that they expected BP would make good.

According to reports Representative Henry Waxman of California said, “BP cut corner after corner...and they were apparently oblivious as to what was happening,” during the hearing which was conducted by the Subcommittee on Oversight and Investigations. “Now the whole Gulf Coast is paying the price,” he reportedly said.

Further Representative Joe Barton of Texas noted, “The picture emerging in this investigation is not one of technological limits, but of unsafe industry practices… It is BP's decision making that was a critical factor in this incident.”

Regarding the escrow fund, BP said in statement that an agreement was reached to create a $20 billion claims fund over the next three and a half years on the basis that BP would initially make payments of $3 billion in the third quarter of 2010 and $2 billion in the fourth quarter of 2010. “These will be followed by a payment of $1.25bn per quarter until a total of $20bn has been paid in,” the company noted.

Settling claims

The fund would be available to satisfy claims such as natural resource damages and state and local response costs and fines and penalties would be excluded from the fund and paid separately. Payments from the fund would be made as they are adjudicated, whether by the Independent Claims Facility (ICF) or by a court, or as agreed by BP, the company said. It added that the ICF would be administered by Kenneth Feinberg, who also served as President Obama’s “pay tsar” in the aftermath of the global financial crisis.