05 August 2013 17:02 [Source: ICIS news]
HOUSTON (ICIS)--The US Federal Energy Regulatory Commission (FERC) on Monday ordered BP to respond to allegations that the UK energy giant manipulated the natural gas market in Texas during the fall of 2008.
The agency said BP has 30 days to file a reply and show cause on why it had not violated FERC’s regulation and why it should not be fined nearly $29m (€22m).
According to the order, BP is accused of manipulating the next-day, fixed-price gas market at the Houston Ship Channel from 18 September 2008 through 30 November 2008.
FERC’s staff alleged that traders at BP’s Southeast Gas Trading (SGT) desk uneconomically used the company’s transportation capacity between Katy and the Houston Ship Channel, made repeated early uneconomic sales and took steps to increase BP’s market concentration there as part of a manipulative scheme.
In a statement on Monday, BP spokesman Geoff Morrell said the company is disappointed that FERC has brought this action and that BP will defend itself against the allegations.
“These allegations are without merit, and we stand by what we previously disclosed publicly in February 2011 – that BP natural gas traders did not engage in any market manipulation in late 2008,” Morrell said.
“The FERC bases its allegations on a recorded two-minute phone conversation between a BP trainee and BP natural gas trader that the regulator has taken completely out of context,” he added. “The recording does not support any allegation of wrongdoing.”
BP said the trader reacted strongly to the trainee’s comments and interrupted him, and the trainee admitted on the call that his characterisation was incorrect.
Additionally, the trader reported the conversation, and BP’s compliance personnel examined the trading.
FERC is proposing a civil penalty of $28m, as well as disgorgement of $800,000 in unjust profits, plus interest, gained from the participation in the Houston Ship Channel market during that time period.
BP has 30 days to respond to the order or request a rehearing on the issue.
($1 = €0.75)
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