President Obama has confirmed that BP will put $20 billion in an escrow fund to be used to compensate individuals harmed by the oil spill. Apparently, the money will be paid into an account over several years. Neither the federal government nor BP will oversee distribution. Instead, the attorney who oversaw distribution of the 9/11 compensation funds will oversee distribution.
Obama also said the amount is not a cap, "The people of the Gulf have my commitment that BP will meet its obligations . . . ." Obama also noted that a $100 million dollar fund will go towards compensating unemployed oil rig workers.
BP Agrees to Pay $20 Billion into Compensation Fund | ABA Journal