BP is to put $US20 billion ($NZ30b) into a fund to pay claims relating to the Gulf of Mexico oil leak.
United States President Barack Obama met executives from the company at the White House on Wednesday. He said afterwards the fund is not a cap on liabilities.
BP is committed to $US5 billion this year, followed by $US1.25 billion per quarter from 2011 until the fund reaches $US20 billion.
The fund is to be run by lawyer Kenneth Feinberg who oversaw compensation claims after the 9/11 attacks.
He is also Mr Obama's "pay tsar", who sets salary limits for executives at companies in receipt of federal bailout funds.
BP also announced its dividend payments will be suspended for the rest of the year.
The company will significantly reduce its investment programme and sell $US10 billion of assets.
Mr Obama said a $US120 million fund would also be set up to compensate oil industry workers.
The oil leak began after an explosion and fire on the Deepwater Explorer on 20 April. The rig sank two days later.
A government panel of scientists believes 35,000-60,000 barrels are leaking into the Gulf each day.