BP – a British oil giant – could have a potential fine of US$48 million as a result of manipulating natural gas market prices after a hurricane in the Gulf of Mexico to illegally make profit.
BP has challenged this accusation made by the US Federal Energy Regulatory Commission (FERC). However, a judge has ruled against the company.
Violating an Act
Judge Carmen Cintron has concluded that BP breached the Natural Gas Act, stating: “BP engaged in market manipulation. This is a classic case of physical for financial benefits. In the ruling, the judge said that as the manipulation had gone on for 48 days, he would support a penalty of US$48 million, even though the company made less than US$250 000 in profits.”
Statements from BP
BP's Geoff Morrell disagrees with the judge’s decision and stated: "As BP demonstrated at the hearing, the FERC enforcement staff's allegations are entirely without merit. The evidence overwhelmingly demonstrated that BP’s natural gas traders did not engage in any market manipulation, and FERC has no jurisdiction over the trading at issue in any event.”
"As the leading marketer of natural gas in North America, BP is committed to adhering to the highest ethical standards, conducting all trading in compliance with all laws and regulations, and maintaining a strong control and compliance environment. BP will appeal this decision to the full commission, as required by federal administrative procedure law."
Edited from various sources Wall Street Journal, City AM, Reuters, by Stephanie Roker