British energy giant BP announced on Wednesday that it will suspend its quarterly dividends and sell 10 billion dollars of assets to support a planned fund to pay for its Gulf of Mexico oil spill.

"The BP board decided we will not pay any further dividends this year," said Carl-Henric Svanberg, Chairman of BP, after a meeting with U.S. President Barack Obama in the White House.

Svanberg also confirmed that the British oil giant has agreed to set aside an initial 20 billion dollars to pay the victims of the oil spill in the Gulf of Mexico.

A statement from BP said the company will initially make payments of five billion dollars into the new fund this year, which will be followed by a payment of 1.25 billion dollars per quarter in 2011 and beyond until a total of 20 billion dollars has been paid in.

The statement also said the company will sell 10 billion dollars of assets and cut investments.