BP agrees to $20 billion fund for oil spill claims: report

British energy giant BP Plc is reported to have reached a tentative agreement with President Barack Obama to create a $20 billion special fund to pay damage claims from the oil spill in the Gulf of Mexico.

BP is reported to have set aside the money in an independently administered fund. But how BP would pay for the fund and how it would affect its quarterly dividend payout is unclear.

The deal was hammered out after talks between Obama and top BP executives, reports said.

BP website also noted the comments made by President Obama last night and confirmed that the company will be discussing with the President his proposal for arrangements to ensure that all legitimate claims in respect in the Gulf of Mexico oil spill are paid out in a fair and timely manner.

"BP will continue to keep the market fully informed of further developments in compliance with its listing obligations," the release said.

Oil and gas, meanwhile, continued to leak at the Deepwater Horizon oil spill site in the Gulf of Mexico, latest BP live video feed showed.

BP today said oil and gas is flowing through a second containment system attached to the Deepwater Horizon rig's failed blow out preventer (BOP).