Bowing down to the constant pressure from the Obama government, British Petroleum finally agreed to setting up of a $20 billion fund. This will be used for paying compensation to all the claims that have come after its oil-spill in the Gulf Coast.

The step was taken by the oil company after four days of grueling negotiation sessions at the White House.

The fund, it said, will be administered by lawyer, Kenneth Feinberg, who will also act as a mediator. He is the person who was looking after the fund that was set up for the September 11 incident.

These will be for resolving the compensation and other claims.

Obama, who is said to be worried about the resident living besides the coastal area, is looking at the fund as a short-term lifeline. It is said looking at the huge reserve that is available in the region that it will take months before the spilling ends.

After the announcement there were rounds of applauds supporting and happiness towards the compensation package.

In the whole development, UK has shown its support towards BP and said that the issue should be resolved mutually.