Gulf of Mexico 'to recover from BP spill by end 2012'

Kenneth Feinberg, Administrator of the Gulf Coast Claims Facility, in Washington, January 2011 Mr Feinberg has faced criticism over the time it is taking to repay claimants

The Gulf of Mexico will have largely recovered from the BP oil spill by the end of 2012, the administrator of the $20bn (£12bn) pay-outs fund has said.

Attorney Kenneth Feinberg said that compensation to those who lost revenue from the disaster would be based on this prediction.

Meanwhile, a judge has ruled that Mr Feinberg make clear to claimants that he is not independent from BP.

The Deepwater Horizon spill was the biggest in US history.

The fund was set up by BP in August to compensate those affected by the spill, and has so far paid out about $3.3bn to 168,000 people.

Mr Feinberg said experts have determined that most of the oil would have dispersed and the economy picked up by the end of next year. There will be a 30% recovery in 2011, he added.

But he also noted that the recovery of oyster harvesting may take longer.

'Hybrid entity'

The assessment was based mainly on reports from a Texas professor and a consulting firm.

Based on the predictions, Mr Feinberg has proposed that claimants receive twice the amount they lost in 2010, apart from oyster harvesters, who will be offered four times as much.

Oil is seen deposited along dead marsh land near Bay Jimmy on January 7, 2011 in Port Sulphur, Louisiana. The damage from the spill is still visible in parts of Louisiana

Florida Attorney General Pamela Bondi, however, questioned the experts' predictions.

"While this office had hoped that the methodology would finally provide some transparency, this document provides no useful information to claimants beyond a simplistic multiplier and is based on very optimistic assumptions about unknown environmental and economic conditions," she said in a court filing.

A federal judge meanwhile said Mr Feinberg was not independent from BP and should not tell claimants that he is.

US District Judge Carl Barbier ordered that he clearly disclose in communications that he is acting for and on behalf of BP.

"The court finds that BP has created a hybrid entity, rather than one that is fully independent of BP," he said.

Mr Feinberg, who was appointed by BP and the White House, has faced repeated criticism about the time it is taking to pay out compensation, as well as the amount being handed out.

About half of the total 485,000 claims filed have been denied because of ineligibility or lack of documentation.

Louisiana resident Mike Helmer, a fishing guide, described the proposed offer as "a joke".

"He's asking people to sign away their rights for basically peanuts. I don't see anyone accepting this," he said . "This is an insult. This is unbelievable."

The Deepwater Horizon rig exploded on 20 April and sank off the coast of the Louisiana, killing 11 workers.

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